Chapter 1        Consumers in a Changing               World                            HACE 3100Consumer EconomicsIssues ...
Economy. . .   . . . The word economy comes from   a Greek word for ―one who manages   a household.‖Consumer EconomicsIssu...
Economics… Economics  is the study or science of  production, distribution, and  consumption. (Goldsmith) Economics is t...
Scarcity . . .       . . . means that society has limited       resources and therefore cannot       produce all the goods...
Society and Scarce Resources:       The  management of society’s       resources is important because       resources are...
Economists study. . .  How                      people make decisions.  How       people interact with each        other...
Consumer Economics… The  study of how people deal with   scarcity, fulfill needs, and select   among alternative goods, s...
Consumer Economics: Keeps us frommaking poor grooming choices Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Consumer Economics lead to…   Careers in consumer    protection, consumer    advocacy, policy    making, education,    la...
Why Study Consumer Economics?   To apply course knowledge to personal    decisions.          When you pump your own gaso...
Why Study Consumer Economics?   To apply course knowledge to social    issues.          What recent economic legislation...
Why Study Consumer Economics? To overcome passivity—to understand and  ―own‖ your place in the economy. To become a Cons...
Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
So what????? One of the goals of this class is to make  you more aware of your surroundings. To make you your own best c...
Consumers: individuals  and groups who   obtain, use, maintain, and   dispose of goods (products) and   services to fulfi...
Goods and Services Goods: tangible objects (e.g., car) Services: intangible actions of work done:  (catering services)Co...
Satisfaction: Also  known as “utility”   (satisfaction, well-being)Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Consumers…. obtain, use, maintain, and   dispose of…..      Obtain…      Use…      Maintain….      Dispose           ...
Though even obtaining can beproblematic Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
The Road to Consumer Economics…   Adam Smith (1776): Author of ―An Inquiry into the Nature    and Causes of the Wealth of...
Capitalism: Capitalism is a social system based on  the recognition of individual rights Under capitalism the state is s...
Seriously…. Do we truly have a pure Capitalistic  society where our choices are made free  and clear of government interv...
Consumerism: The    belief that    goods give    meaning to    individuals and    their roles in    society.Consumer Eco...
Consumerism: How much does this belief drive our  consumption habits? Do you buy goods because you care about  what othe...
Goods and Services Remind me again why we buy goods and  services? Buying goods and services is an act of  trust.      ...
Goods and Services True, because we assume our purchases  will increase our satisfaction; however… Consumption may not a...
Caveat Emptor ―May  the   buyer   beware‖Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Bad Service………….Consumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Goods and Services to meet HumanNeeds Needs: The barest minimum physical necessities  that allow you to survive.       ...
Maslow’s Hierarchy of NeedsConsumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Needs versus WantsConsumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Wants:   What people would acquire if their    resources were unlimited.          Examples:Consumer EconomicsIssues and ...
Resources:   Things used to produce other things to satisfy    people’s needs and wants.   Provide the means to satisfy ...
Scarcity:   Not enough resources are available to    satisfy one’s needs and wants and choices    have to be made about t...
The Consumption Process   Because there are so many aspects of    consumption it can be thought of as a    process.Consum...
Consumption Process     Awareness–what are needs and wants     Thinking—gather information     Planning—shopping around...
Awareness A ―stimulus‖ lets us know that something  is needed or desired. A broken computer makes us aware  another one ...
Thinking The mental exploration of the possibilities:  weighing pros and cons and gathering  information about the produc...
Planning   Deciding ―ordered steps of action‖ needed    to make the purchase a reality.          Planning on taking $50 ...
Implementing You actually sit down at the computer and  serf the web for the best price for the  product. You go to the ...
Evaluating Spend time reflecting on your outcome. Is the product in OK condition? Did you achieve some level of satisfa...
Factors that influence consumers      Economics      History      Consumer culture      Individual traits, e.g., age ...
Economics   The condition of national and worldwide    economies during times of decision    making.          The unempl...
History The background history of each person  influences his or her decisions. This  includes our own personal histories...
Consumer culture Generally refers to patterns of human  activity and the symbolic structures that  give such activity sig...
Individual Traits Age Eye color Hair color/type Weight HeightConsumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Physiological needs Thirst Hunger Safety Housing ProtectionConsumer EconomicsIssues and Behaviors, 1/e   HACE 3100
Desire for technology Technology includes the methods and  materials that individuals use to get what  they want. Includ...
Political area Politics affect our economic decision  making. Policies impact our consumption…..we  have to buy auto ins...
Next Class Read Chapter 1: Consumers in a Changing  World Yes………lots and lots of people and dates  and places and agenci...
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Introductory lecture in consumer economics class

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Consumers in A Changing World

  1. 1. Chapter 1 Consumers in a Changing World HACE 3100Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  2. 2. Economy. . . . . . The word economy comes from a Greek word for ―one who manages a household.‖Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  3. 3. Economics… Economics is the study or science of production, distribution, and consumption. (Goldsmith) Economics is the study of how society manages its scarce resources. (Miller)Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  4. 4. Scarcity . . . . . . means that society has limited resources and therefore cannot produce all the goods and services people wish to have.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  5. 5. Society and Scarce Resources: The management of society’s resources is important because resources are scarce. Scarcity implies choice and choice implies cost.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  6. 6. Economists study. . .  How people make decisions.  How people interact with each other.  The forces and trends that affect the economy as a whole.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  7. 7. Consumer Economics… The study of how people deal with scarcity, fulfill needs, and select among alternative goods, services, and actions.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  8. 8. Consumer Economics: Keeps us frommaking poor grooming choices Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  9. 9. Consumer Economics lead to… Careers in consumer protection, consumer advocacy, policy making, education, law, business, management, government, marketing…Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  10. 10. Why Study Consumer Economics? To apply course knowledge to personal decisions.  When you pump your own gasoline what is the last decision you have to make to be a safe consumer?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  11. 11. Why Study Consumer Economics? To apply course knowledge to social issues.  What recent economic legislation will have an impact on you?  Health care?  Cleaner coal burning technology?  Screening tests for newborns?  Georgia increased its screenings from 13 to 29  Down’s syndrome screening?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  12. 12. Why Study Consumer Economics? To overcome passivity—to understand and ―own‖ your place in the economy. To become a Consumer Protection Advocate…  Standing up for consumer rights.  One Person Can Make a Difference!  Ralph Nader  Erin Brockovich  YouConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  13. 13. Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  14. 14. Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  15. 15. So what????? One of the goals of this class is to make you more aware of your surroundings. To make you your own best consumer advocate; if you don’t educate and protect yourself who will? You need to leave college with a firm grasp of your world: including “the good, the bad and the ugly”……Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  16. 16. Consumers: individuals and groups who obtain, use, maintain, and dispose of goods (products) and services to fulfill needs and increase satisfaction.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  17. 17. Goods and Services Goods: tangible objects (e.g., car) Services: intangible actions of work done: (catering services)Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  18. 18. Satisfaction: Also known as “utility” (satisfaction, well-being)Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  19. 19. Consumers…. obtain, use, maintain, and dispose of…..  Obtain…  Use…  Maintain….  Dispose of….Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  20. 20. Though even obtaining can beproblematic Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  21. 21. The Road to Consumer Economics… Adam Smith (1776): Author of ―An Inquiry into the Nature and Causes of the Wealth of Nations” stated that: ―consumers act in their own self interest and markets work with the invisible hand.”  The founder of modern economics  Felt consumers should be given the freedom and authority to run their own economic affairs.  The US’s founding fathers liked the idea that wealth should be based on goods and services produced and consumed by consumers.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  22. 22. Capitalism: Capitalism is a social system based on the recognition of individual rights Under capitalism the state is separated from economics (production and trade), just like the state is separated from church/religion. Being able to freely choose among a vast array of commodities gives people a sense of freedom.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  23. 23. Seriously…. Do we truly have a pure Capitalistic society where our choices are made free and clear of government intervention? Examples?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  24. 24. Consumerism: The belief that goods give meaning to individuals and their roles in society.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  25. 25. Consumerism: How much does this belief drive our consumption habits? Do you buy goods because you care about what others think about your good? Who only shops at name brand stores? Who shops at Walmart? Who shops at Goodwill?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  26. 26. Goods and Services Remind me again why we buy goods and services? Buying goods and services is an act of trust.  True?  False?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  27. 27. Goods and Services True, because we assume our purchases will increase our satisfaction; however… Consumption may not always bring satisfaction:  Unsatisfactory products  Injurious consumption (negative in long-run)  Consumer Fraud  Examples?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  28. 28. Caveat Emptor ―May the buyer beware‖Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  29. 29. Bad Service………….Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  30. 30. Goods and Services to meet HumanNeeds Needs: The barest minimum physical necessities that allow you to survive.  Examples:Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  31. 31. Maslow’s Hierarchy of NeedsConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  32. 32. Needs versus WantsConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  33. 33. Wants: What people would acquire if their resources were unlimited.  Examples:Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  34. 34. Resources: Things used to produce other things to satisfy people’s needs and wants. Provide the means to satisfy the family system’s demands.  Material resources-(non human)  Examples:  Human resources-(personal characteristics)  Examples:Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  35. 35. Scarcity: Not enough resources are available to satisfy one’s needs and wants and choices have to be made about their use.  Examples of scarce resources?  I WILL ONLY BE AWARDING THE TOP 5 STUDENTS IN THIS CLASS WITH A’S.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  36. 36. The Consumption Process Because there are so many aspects of consumption it can be thought of as a process.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  37. 37. Consumption Process Awareness–what are needs and wants Thinking—gather information Planning—shopping around Implementing--buying Evaluating–would you re-purchase?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  38. 38. Awareness A ―stimulus‖ lets us know that something is needed or desired. A broken computer makes us aware another one is needed. Your friend’s Play Station 2 game system purchase makes you aware you want one!!Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  39. 39. Thinking The mental exploration of the possibilities: weighing pros and cons and gathering information about the product in question. Random set of thoughts.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  40. 40. Planning Deciding ―ordered steps of action‖ needed to make the purchase a reality.  Planning on taking $50 from each pay check to pay for it.  Planning on the date you will have the money.  Making a plan to get to the store/or on the internet to make the purchase….Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  41. 41. Implementing You actually sit down at the computer and serf the web for the best price for the product. You go to the store to price the product. You actually put the $50 into the bank each paycheck. Or you really go and make the purchase.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  42. 42. Evaluating Spend time reflecting on your outcome. Is the product in OK condition? Did you achieve some level of satisfaction with your purchase? Compared to something else was this the right choice? Should you make an alternative choice?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  43. 43. Factors that influence consumers Economics History Consumer culture Individual traits, e.g., age Physiological needs Desire for technology Political area, e.g., government standardsConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  44. 44. Economics The condition of national and worldwide economies during times of decision making.  The unemployment rate  Interest rates  Inflation ratesConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  45. 45. History The background history of each person influences his or her decisions. This includes our own personal histories and also the histories of our families. The history of the area in which the person resides influences consumer decision making as well.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  46. 46. Consumer culture Generally refers to patterns of human activity and the symbolic structures that give such activity significance It is the way people live in accordance to beliefs, language, history, or the way they dress Culture includes the groups in which an individual or family resides and their behaviors or traditions.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  47. 47. Individual Traits Age Eye color Hair color/type Weight HeightConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  48. 48. Physiological needs Thirst Hunger Safety Housing ProtectionConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  49. 49. Desire for technology Technology includes the methods and materials that individuals use to get what they want. Including machines, techniques, material objects, and processes.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  50. 50. Political area Politics affect our economic decision making. Policies impact our consumption…..we have to buy auto insurance but we don’t have to buy health insurance. If the draft is reinstated some of you may buy a one way ticket to Canada.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  51. 51. Next Class Read Chapter 1: Consumers in a Changing World Yes………lots and lots of people and dates and places and agencies!!! The pain begins immediately do not complain that you have not been sufficiently warned Consumer EconomicsIssues and Behaviors, 1/e HACE 3100

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