HACE3100 Notes

HACE3100 Notes - Ch. 1: Consumers in a Changing World...

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Ch. 1: Consumers in a Changing World INTRODUCTION Consumer economics – study of how people deal with scarcity, fulfill needs, and select among alternative goods, services, and actions Studying consumer economics o Enriches our lives by helping us get the things we want o Increases understanding of factors influencing ours and other’s choices o Improves understanding of how marketplace works o Increases our awareness of what is fair o Encourages us to think about how we spend and invest our money End result of studying consumer economics is improved decision making WHY STUDY CONSUMER ECONOMICS? Main objective: develop ability to apply consumer economics knowledge to regulatory and social issues, as well as to personal buying decisions To overcome passivity; to understand and “own” your place in the economy o Consumer advocacy – standing up for consumer rights Ex. Ralph Nader, Erin Brockovich, Kent State riot, Tienemen square WHO CONSUMES AND WHY? Consumers – individuals or groups such as families, who obtain, use, maintain, and dispose of products and services to increase life satisfaction and fulfill needs Adam Smith (1776) o Wrote “An Inquiry into the Nature and Causes of the Wealth of Nations” o Stated that “consumers act in their own self-interest and markets work with the invisible hand” o Founder of modern economics o o US’s founding fathers like idea that wealth should be based on goods and services produced and consumed by consumers Capitalism – a social system based on the recognition of individual rights o Under capitalism, state separated from economics (production and trade), just like state is separated from religion o Being able to choose among vast array of commodities gives people sense of freedom Consumerism – belief that goods give meaning to individuals and their roles in society GOODS AND SERVICES o o Utility – satisfaction; well-being Buying or using goods and services is an act of faith Injurious consumption – happens when individuals or families make consumption
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decisions that have negative consequences, affecting their quality of life in the long run Caveat emptor – “May the buyer beware” HUMAN NEEDS Needs – the barest minimum physical necessities that allow you to survive Maslow’s Hierarchy of Needs – physical-safety-relational-esteem-self-actualization Wants – what people would acquire if their resources were unlimited Resources – things used to produce other things to satisfy people’s needs and wants o Material resources – non-human (ex. $) o Human resources – personal characteristics (ex. education, personality) Scarcity – Not enough resources are available to satisfy one’s needs and wants and choices have to be made about their use 301 million people in US; 80 million households (<50% have married coupled)
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This note was uploaded on 03/23/2011 for the course HACE 3100 taught by Professor Moorman during the Spring '09 term at UGA.

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HACE3100 Notes - Ch. 1: Consumers in a Changing World...

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