FHCE 3200 1st Edition Lecture 2 Outline of Last Lecture I. Consumers in a Changing World Outline of Current Lecture II. History, Consumer Culture, Individual Traits, Physiological Needs, Desire for Technology, Political Area, etc. III. The Business CycleIV. Supply Current LectureII. Factors that influence consumers…a. History background history of each person influences decisions (personal and family history), ex. Ex husband made spaghetti so you no longer make it b. Consumer culture refers to patterns of human activity and the symbolic structures that give such activity significance, the way people live in accordance to their beliefs & historyc. Individual traits  age, eye color, hair color, weight, & height d. Physiological needs  thirst, hunger, safety, housing, protection e. Desire for technology technology includes methods and materials that individuals use to get what they want (machines, techniques, etc.) f. Political area  politics affect our economic decision-making, policies impact ourconsumption (ex. We have to buy auto insurance if we want to drive on public highway, now we have to buy health insurance) i. Medical marijuana (in GA trying to legalize to help babies) III. Consumption Process a. *KNOW THE ORDER OF THESE STEPS & if given a scenario, figure it outb. Awareness—what are needs and wants c. Thinking—gather information d. Planning—shopping arounde. Implementing—buyingf. Evaluating—would you repurchase? g. ***ATPIE (acronym) meaning Always Think Positive In Economics IV. Economics & the Business Cycle a. ECONOMICS: the study of production, distribution, and consumption These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.b. How we make decisions depending on the “business cycle” (recession, expansion, etc.) c. The study of how societies use scarce resources to produce valuable commodities and distribute them among different people d. THE BUSINESS CYCLE: refers to the periodic fluctuating of economic activityi. Its stages include recession and expansion, peaks and troughs e. EXPANSION: prosperity, growth, high output, low unemployment, increased retail sales and housingi. 8.8 million jobs lost in Great Recessionf. UNEMPLOYMENT: persons are classified as unemployed if they do not have a job,have actively looked for work in the prior 4 weeks, and are currently available for work i. Notice that discouraged workers are not in this ii. Government conducts monthly survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country iii. Recession entails 6 months to 1 year (temporary decline or downturn in economy, declining output, income, employment) iv. Deep recession is called a DEPRESSIONg. RECOVERY: when economic activity picks up, leading to expansion. Production onthe rise, spending on the rise, unemployment declines, consumer confidence rises h. Real Gross Domestic Product…i. This measures if economy is healthyii. *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 inflationiii. Lets us see how US economy is doing and also compare it with other countries i. INFLATION: the steady increase of prices makes the purchasing power of your dollar smaller, “a dollar don’t buy what it used to” j. DEFLATION: indicates falling pricesV. Supplya. A fundamental economic concept that describes the total amount of a specific good or service that is available to consumersb. Ex. Chocolate covered scorpions v. chocolate covered bacon c. Ex. After 9/11, huge American flag shortage…why? Demand increased so available supply could not keep up d. Law of Supply (Goldsmith)i. As the overall available “supply” of a good or service goes up (increases); generally the price comes down (decreases)ii. As the pool of available workers increases…the wages offered, decreasesiii. Ex: As the supply of shuttle services incrased, the price per trip decreased (Groome) e. Quantity supplied:i. This refers to the amount of a certain product producers are able/willing to offer for sale at each possible price (ex. Steaks vs. dog food) ii. Means movement along a supply curve due to a change in price iii. Price changes affect the quantity supplied, but do not impact the overall supply f. Law of Supply (Miller)i. An economic rule stating that the price and quantity supplied move in thesame direction ii. As the price goes up for a good or service, producers of that good or service generally provide larger quantities, all other things being constant…therefore, if the price of a product that producers are able to get consumers to pay increases, the quantity of that product that producers are willing to supply should also increase (ex. Parking g. Why supply curve shifts?i. Prices of other goods—the supply of one good may decrease if the market price of another good increases, causing producers to reallocate resources to produce larger quantities of the more profitable good ii. Prices of relevant inputs—if the cost of resources used to produce a good increases, sellers will be less inclined to supply the same quantity at a given price, and the supply curve will shift LEFT iii. Technology—technological advances that increase production efficiency shift the supply curve RIGHTVI. Demand a. The term demand signifies the ability or willingness of consumers to BUY a particular commodity at a given point of time b. There is a demand for the good or there is