This document provides an overview of key concepts in consumer economics. It defines economics as the study of how society manages its scarce resources. Consumer economics specifically examines how people deal with scarcity by fulfilling needs and selecting among alternatives. The consumption process is discussed as a cycle of awareness of needs/wants, information gathering, planning purchases, implementing purchases, and evaluating the outcomes. Maslow's hierarchy of needs and the distinction between needs and wants are also introduced.

1. Chapter 1
Consumers in a Changing
World
HACE 3100
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

2. Economy. . .
. . . The word economy comes from
a Greek word for ―one who manages
a household.‖
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

4. Scarcity . . .
. . . means that society has limited
resources and therefore cannot
produce all the goods and services
people wish to have.
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

7. Consumer Economics…
 The study of how people deal with
scarcity, fulfill needs, and select
among alternative goods, services,
and actions.
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

8. Consumer Economics: Keeps us from
making poor grooming choices 
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

9. Consumer Economics lead to…
 Careers in consumer
protection, consumer
advocacy, policy
making, education,
law, business,
management,
government,
marketing…
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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
 You
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

13. Consumer Economics
Issues and Behaviors, 1/e HACE 3100

14. Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

16. Consumers:
 individuals and groups who
obtain, use, maintain, and
dispose of goods (products) and
services to fulfill needs and
increase satisfaction.
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

17. Goods and Services
 Goods: tangible objects (e.g., car)
 Services: intangible actions of work done:
(catering services)
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

18. Satisfaction:
 Also known as “utility”
(satisfaction, well-being)
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

19. Consumers….
 obtain, use, maintain, and
dispose of…..
 Obtain…
 Use…
 Maintain….
 Dispose of….
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

20. Though even obtaining can be
problematic 
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

23. Seriously….
 Do we truly have a pure Capitalistic
society where our choices are made free
and clear of government intervention?
 Examples?
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

24. Consumerism:
 The belief that
goods give
meaning to
individuals and
their roles in
society.

Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

28. Caveat Emptor
 ―May the
buyer
beware‖
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

29. Bad Service………….
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

30. Goods and Services to meet Human
Needs
 Needs:
 The barest minimum physical necessities
that allow you to survive.
 Examples:
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

31. Maslow’s Hierarchy of Needs
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

32. Needs versus Wants
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

33. Wants:
 What people would acquire if their
resources were unlimited.
 Examples:
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

36. The Consumption Process
 Because there are so many aspects of
consumption it can be thought of as a
process.
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

37. Consumption Process
 Awareness–what are needs and wants
 Thinking—gather information
 Planning—shopping around
 Implementing--buying
 Evaluating–would you re-purchase?
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

43. Factors that influence consumers
 Economics
 History
 Consumer culture
 Individual traits, e.g., age
 Physiological needs
 Desire for technology
 Political area, e.g., government
standards
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

44. Economics
 The condition of national and worldwide
economies during times of decision
making.
 The unemployment rate
 Interest rates
 Inflation rates
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

47. Individual Traits
 Age
 Eye color
 Hair color/type
 Weight
 Height
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

48. Physiological needs
 Thirst
 Hunger
 Safety
 Housing
 Protection
Consumer Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100

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 Economics
Issues and Behaviors, 1/e HACE 3100