1. Consumer Economics by Elizabeth B. Goldsmith
Chapter 1
Consumers in a Changing World
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2. Learning Objectives Understand the consumer Define consumer economics
Explain the market economy
Adam Smith’s contribution to consumer economics
The five step consumption process
Three questions to address
The three parts of the business cycle

3. Introduction The fundamentals of consumerism
How the changing world affects consumers
The multiple roles of consumers
The roles of producers/manufacturers, suppliers, & retailers
Government involvement in economic systems
The consumer decision making process

4. Consumer Economics
Consumer economics is the study of how people deal with scarcity, fulfill needs, and select among alternative goods, services, and actions.
It provides an understanding of how the marketplace works, what our role is in it, and how our choices affect our lifestyles.

5. We need to consume to exist
Who Consumes and Why?
We need to consume to exist
Consumerism refers to the belief that goods give meaning to individuals and their roles in society

6. The Market Economy Adam Smith
When producers and consumers are free to make their own decisions all will benefit
Adam Smith

7. Copyright©2009 Taylor & Francis Group, an informa business
Human Needs
Physiological needs
Safety
Belongingness
Esteem
Self-actualization
Copyright©2009 Taylor & Francis Group, an informa business

8. The Five Step Consumption Process
Awareness
Thinking
Planning
Implementation/action
Evaluation

9. Copyright©2009 Taylor & Francis Group, an informa business
The Business Cycle
Expansion
Recession
Recovery
Supply
Demand
Equilibrium Price
Copyright©2009 Taylor & Francis Group, an informa business

10. Three Questions to Address
What is to be produced?
How are these goods and services produced?
For whom are they produced?
Copyright©2009 Taylor & Francis Group, an informa business

11. Important Issues to Consider
Market Economy and Competition
The importance of Property Rights
Consumer Sovereignty
Monopolies
Economic Systems
The Internet and E-commerce
Copyright©2009 Taylor & Francis Group, an informa business

12. Chapter Summary
Who consumes, why do they consume, what affects consumption?
The role of the market economy
Human needs and the consumption process
How consumers interact with the economy