big advocate for the auto safety industry 

Erin Brockovich

 found out that local people were getting sick form the ground 

water, which led to a class action lawsuit. Also an advocate for Guardasil- helps 

prevent young girls from getting HPV and cervical cancer

1) to apply course knowledge to personal decisions (buying designer purses)

2) To apply course knowledge to social issues (minimum wage laws)

3) To overcome passivity--to understand and "own" your place in the economy

(ralph nader and erin brockovich)

Chinese students revolt against communist government. 

China sent in tanks. 

The “Bonus Army” War in DC

20,000 former soldiers and families converged on 

DC in 1932 (height of the great depression) so support congressman Wright 

Patman’s bill to advance the bonus payment promised to WW I Veterans. The US 

sent in military tanks 

Kent State 5/4/1970

Students were protesting the US expansion of the Vietnam 

War. The US called in the national guard, which shot 13 and killed 4. 

 Everybody consumes because we all need to buy, whether it is 

food, water, clothing, etc 

Individuals and groups who obtain, use, maintain, and dispose of goods (products) and services 

to fulfill needs and increase satisfaction.  

goods are tangible objects

AND

services are intangible actions of work done. 

"utility"

(satisfaction, well-being)

1776

• founder of modern economics
• author of "An Inquiry into the nature and causes of the weatlh of nations"
• stated that "consumers act in their own self interest and markets work with the invisible hand"

a social system based on the recognition of individual rights 

-the state is seperated from economics (production and trade) just like the state is seperated from religion.

Do we truly have a pure Capitalistic society where our choices are made free and clear of 

government intervention?

Examples?

NO.

We are made to purchase insurance, and there are speed limits

Consumerism:

**know this!

The belief that goods give meaning to individuals and their roles in society 

examples: shopping at high end name brand stores vs. walmart and goodwill

Why do we buy goods and services? 

AND, is buying goods and services an act of trust?

to increase our well-being and satisfaction (utility)

YES, it is an act of trust.We assume that our purchases will increase our 

satisfaction, but that is not always the case. 

o Unsatisfactory products 

o Smoking/Drinking 

o Consumer fraud 

Needs: 

examples?

the barest minimum physical necessities that allow you to survive. 

ex: food, water, shelter

Wants:

What people would acquire if their resources were unlimited 

• Examples? Nice clothes, TVs, etc 

Things used to produce other things to satisfy people’s needs and wants 

 Examples? Ipod, money, cars, lumber 

 Examples? Knowledge, desire, passion, time management skills 

Not enough resources are available to satisfy one’s needs and wants and choices have to be made about their use. 

o Examples of scarce resources? oil, football tickets

• awareness-what are needs and wants. (stimulus-"hunger")
• thinking-gather information. (mental exploration of weighing pros and cons)
• planning- (deciding an order of "steps of action" to obtain good or service)
• implementing-looking for the product or actually buying it. 
• evaluating-would you re-purchase? (reflect on the outcome)

• Economics: (unemployment rate, interest rate, inflation rates)

• History :(background history-personal or past polocies)

• Consumer Culture: (way people live in accordance to beliefs, language, history, or the way they dress)

• Individual traits, e.g., age, weight, height 

• Physiological Needs : (thirst, hunger, safety)

• Desire for Technology 

• Political Area, e.g., government standards, policies 

refers to the periodic fluctuations of economic activity.  The cycle involves 

shifts over time between periods of relatively rapid growth of output (recovery and prosperity) 

alternating with periods of relative stagnation or decline (contraction or recession).

• These fluctuations are often measured using the real gross domestic product (GDP) 

The steady increase of prices 

• Deflation: indicates falling prices 

GDP: 

"gross domestic product"

A measure of the value of all goods and services newly produced in a country during some period 

of time, usually one year or one quarter; adjusted for inflation

scarcity

A condition in which there is an insufficient amount or supply of a product/resource 

• A shortage 

 all other factors being equal, a greater quantity of a product will be supplied at a higher price than at a lower price  

Therefore: 

• As the price of a good increases, suppliers will attempt to maximize profits by increasing the quantity of the product sold 

all other factors being equal, consumers will buy a greater quantity of a product at a lower price than at a higher price

Therefore from a consumer perspective:

• P increases Q demanded decreases 

an increase in the price of a complement (i.e. ketchup) reduces the 

demand curve to the left for hotdogs (less demand) 

Substitutes: an increase in the price of a substitute product (burgers) increases demand, 

shifting the demand curve to the right for hotdogs (more demand)

Equilibrium price: 

BUT,

• Why then do we go from equilibrium price to clearance sale price? 

o A price at which the quantity of a good or service demanded is exactly equal to the quantity that is supplied 

•  Demand for a good decreases, the equilibrium price is now too high – consumers won’t pay it.  Seller must drop price to sell remaining supply 

Demographics and Consumption:

explain how population changes affect consumption patterns

• Baby Boomers (1945-1957) now need Geritol and rocking chairs 

• Shadow Boomers (1958-1963) are having mid life crises 

• Generation X (1963-1978) are consuming homes and furnishings 

• Generation Y (1978-2000) are living at home or in college (think "Y" for young peope)

• “When consumers decide which goods will survive and to the idea that producers cannon dictate consumer tastes.” – Goldsmith 

• Those with money and other assets are able to use their purchasing power to tell producers of goods and services what to produce (and how much) 

When there is perfect competition 

o Many consumers 

o Many producers & sellers 

o Perfect information 

o Easy entry & exit into market 

o Homogeneous products- (Exactly the same product) 

• Ability to acquire 

• Ability to understand 

• Biased information 

Producer Sovereignty   

Producers have the power to decide which products and services society will produce and consume 

How many of our consumption/production choices are consumer driven and how many are government driven? 

• Government Driven- Buying auto insurance and purchasing a drivers license  --> have to have on you. 

another example: Digital vs. Analog TV

 On 2/18/2009, millions of TVs had to be fitted to recieve all-digital broadcasts. 

The Senate voted to end over the air analog TV in a move to free up radio specctrum for broadband links.