Consumer Economics Chapter 1 Terms

Questions and Answers

What is consumer economics?

The study of how people deal with scarcity, fulfill needs, and select among alternative goods, services, and actions.

Who are consumers?

Individuals or groups such as families who obtain, use, maintain, and dispose of products and services to increase life satisfaction and fulfill needs.

What are 'cabinet castaways'?

Products not used immediately after purchase that are slowly pushed to the back of the cabinet and forgotten.

What is consumerism?

The belief that goods give meaning to individuals and their roles in society. Signup and view all the answers

Who is Adam Smith?

The founder/father of modern economics, who wrote 'An Inquiry into the Nature and Causes of the Wealth of Nations'. Signup and view all the answers

Buying or using goods and services is an act of ______.

faith Signup and view all the answers

What is injurious consumption?

Consumption decisions that have negative consequences, affecting quality of life in the long run. Signup and view all the answers

What does 'caveat emptor' mean?

May the buyer beware. Signup and view all the answers

Who is Abraham Maslow?

A psychologist whose ideology states that humans have needs which must be met before moving to higher-order needs. Signup and view all the answers

What are the levels of Maslow's Hierarchy of Needs?

Physiological, Safety, Belongingness and Love, Esteem, and Self-Actualization. Signup and view all the answers

What is a household?

Related family members and all the unrelated persons who share a housing unit. Signup and view all the answers

Humans need to consume to exist.

True Signup and view all the answers

What is demography?

The study of human populations, including characteristics such as size, growth, density, distribution, movement, and other vital statistics. Signup and view all the answers

What are demographics?

Data used to describe populations or sub-groups. Signup and view all the answers

What are the steps in the 5 step consumer process?

Awareness, Thinking, Planning, Implementing/Acting, Evaluating. Signup and view all the answers

What are needs?

Things that are deemed necessary, such as food. Signup and view all the answers

What are wants?

Things wished for or desired, such as an expensive car. Signup and view all the answers

What are goals?

End results, things you are striving for, based on values. Signup and view all the answers

What does thinking involve in consumer decision-making?

A mental exploration of the possibilities: weighing the pros and cons and gathering information. Signup and view all the answers

What does planning involve in consumer decision-making?

Deciding on an ordered set of steps or activities. Signup and view all the answers

What is implementing/acting in the consumer process?

To put plans into action: to do something or go somewhere. Signup and view all the answers

What is evaluating in the consumer process?

To reflect on outcomes: am I happy with what happened? Signup and view all the answers

What is consumer style?

Patterns of behaving or ways of making financial decisions and acting on them. Signup and view all the answers

What are the 7 factors of consumer style?

Economics, History, Culture, Personality, Biology or Environment, Technology, Politics. Signup and view all the answers

What is economics?

The study of or science of production, distribution, and consumption. Signup and view all the answers

What is real gross domestic product (GDP)?

A measure of the value of all the goods and services newly produced in a country during some period of time, adjusted for inflation. Signup and view all the answers

What is inflation?

A steady increase in prices. Signup and view all the answers

What is deflation?

Indicates falling prices. Signup and view all the answers

What is the business cycle?

A way to illustrate the usual expansions or contractions in the economy, made up of 3 stages. Signup and view all the answers

What are the 3 stages of the business cycle?

Expansion, Recession, Recovery. Signup and view all the answers

What is expansion in economic terms?

A period of prosperity, growth, and higher output, low unemployment, and increased retail sales. Signup and view all the answers

Study Notes

Consumer Economics Overview

Consumer economics studies how individuals manage scarcity, fulfill needs, and make choices among alternatives.
Consumers are people or groups (like families) who obtain, use, and dispose of goods to enhance life satisfaction.

Key Concepts

Cabinet Castaways: Forgotten products in cabinets illustrate inefficiency in consumer habits.
Consumerism: The belief that goods provide meaning and identity within society.
Adam Smith: Known as the father of modern economics; authored "The Wealth of Nations," arguing for the consumer's role in coordinating economies.

Psychological Aspects

Faith: Consumption is seen as an act of faith in the value or utility of goods.
Injurious Consumption: Decisions that adversely affect long-term quality of life stem from poor consumption choices.

Economic Principles

Caveat Emptor: A principle meaning "let the buyer beware," highlighting consumer responsibility in purchasing.
Demography: The study of populations, including size, growth, and distribution statistics.
Demographics: Data that describes populations or sub-groups.

Needs and Wants

Maslow's Hierarchy of Needs: Levels include physiological, safety, belonging, esteem, and self-actualization.
Needs: Essential requirements for survival (e.g., food).
Wants: Desired items beyond necessities (e.g., luxury cars).

Consumer Decision-Making Process

5-Step Consumer Process: Involves awareness, thinking, planning, acting, and evaluating.
Thinking: Involves exploring possibilities and weighing pros and cons.
Planning: Involves strategizing steps needed to achieve goals.
Implementing/Acting: Execution of plans, involving actions like product sampling or purchasing.
Evaluating: Reflecting on consumer satisfaction post-purchase.

Consumer Style Influences

Consumer Style: Refers to behavioral patterns in financial decision-making.
7 Factors Influencing Consumer Style: Include economics, history, culture, personality, environment, technology, and politics.

Economic Indicators

Economics: The study of production, distribution, and consumption of goods.
Real GDP: Measures the value of newly produced goods/services in a country, adjusted for inflation.
Inflation: Represents a consistent increase in prices over time.
Deflation: Characterized by a decrease in prices.
Business Cycle: Illustrates economic expansions and contractions across three stages: expansion, recession, and recovery.

Stages of the Business Cycle

Expansion: Marked by prosperity, growth, low unemployment, and high retail sales.
Recession: A decline in economic activity and retail performance.
Recovery: A phase where economic activity begins to rise after a recession.

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Explore key terms from Chapter 1 of Consumer Economics to deepen your understanding of how individuals manage scarcity and fulfill their needs. These flashcards cover essential concepts like consumer behavior and product usage. Test yourself and enhance your knowledge!