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| The study of how people deal with scarcity, fulfill needs, and select among alternative goods, services, and actions. |
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| Studying consumer economics ... |
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| Helps understand the things we want, increases understanding of the factors influencing our descisions, increases understanding of the marketplace. |
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| Why study consumer economics? |
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| To apply course knowledge to personal decisions and social issues, and to overcome passivity (to "own" your place in the economy) |
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| individuals or groups who obtain, use, maintain, and dispose of goods and services to fulfill needs and increase satisfaction. |
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| intangible actions of work done |
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| ___ % of purchased products are never used and eventually thrown out |
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| the belief that goods give meaning to individuals and their roles in society |
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| "Consumers act in their own self interest." He felt that consumers should be given the freedom to run their own economic affairs. |
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| happens when people make consumption decisions that have negative consequences. |
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| a social system based on the recognition of individual rights |
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| Under capitalism, the state is separated from ___.. |
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Definition
| economics (production and trade) and religion |
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| The 5 step consumption process: |
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Definition
Awareness -stimulus
Thinking -mental exploration of options
Planning -ordered steps of action
Implementing -actually buying
Evaluating -reflecting on your outcome |
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| things used to produce other things to satisfy people's needs and wants |
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| patterns of human activity and the symbolic structures that give such activity significance |
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| the groups in which an individual resides and their behavior and traditions |
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| the methods and materials ppl use to get what they want (like machines, techniques, material objects and processes) |
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| the science of production, distribution, and consumption |
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| the study of how societies use scarce resources to produce commodities and distribute them among different people. |
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| a measure of the value of all goods and services produced in a country during some period of time, adjusted for inflation. |
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Periodic fluctuations of economic activity:
expansion
recession
recovery |
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| unlimited wants, limited supplies |
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| Maslow's Hierarchy of Needs |
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Definition
1. physical
2. safety
3. relational
4. esteem
5. self-actualization |
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| A person's ____ influences his/her decisions. |
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Definition
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| A few physiological needs: |
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| as the supply of a good goes up, the price goes down |
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| As the price of a good goes up, the quantity demanded goes down |
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Definition
| when quantity demanded equals quantity supplied. |
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| Why the supply curve shifts: |
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Definition
1. price of other goods
2. number of sellers (more sellers=more supply=shift right)
3. price of relevant inputs(cost^ = shift left)
4. technology advances = shift right |
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| Why the demand curve shifts: |
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Definition
1. consumer preference (styles)
2. compliments(^P of comp = shift left)
3. substitues (^P of sub = shift right)
4. ^ income = shift right |
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Term
| If the demand for a product decreases, the equilibrium price is now ___. |
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Definition
| too high and consumers won't pay it. |
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| ____ changes affect consumption patterns. |
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Definition
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| 1978-2000 living at home or in college |
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Definition
| consumers decide which goods will survive |
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Term
| consumer sovereignty exists when___ |
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Definition
there's perfect competition: many consumers, many producers and sellers, perfect information (knowing how much a product costs @ different places), easy market entrance and exit,
homogenous products (substitutes). |
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Term
| 3 barriers to information: |
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Definition
1. ability to acquire
2. ability to understand
3. biased information |
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