Hace Vocab For Test 1

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Consumer economics

Back 1

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

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Consumers

Back 2

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

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Consumerism

Back 3

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

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Adam Smith

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published "An Inquiry into the Nature and Causes of the Wealth of Nations in 1776

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Injurious consumption

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happens when individuals or families make consumption decisions that will have negative consequences, affecting their quality of life in the long run

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Caveat emptor

Back 6

"May the buyer beware"

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Household

Back 7

includes the related family members and all the unrelated persons who share a housing unit

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Demography

Back 8

the study of human populations, including characteristics such as size, growth, density, distribution, movement, and other vital statistics

Front 9

Demographics

Back 9

refers to data used to describe populations or subgroups

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Maslow's Hierarchy of Needs

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(from bottom to top of pyramid)
-Physiological needs
-Safety
-Belongingness & love
-Esteem
-Self-actualization

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Needs

Back 11

things that are deemed necessary
ex. food

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Wants

Back 12

things wished for or desired
ex. expensive car

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Consumption Process

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Awareness--> thinking --> planning --> implementing/acting --> evaluating

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Goals

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end results, things you are striving for, and are based on values

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Consumer style

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patterns of behaving or ways of making financial decisions and acting on them

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7 factors influencing consumer style

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1. Economics
2. History
3. Culture
4. Personality
5. Biology or environment
6. Technology
7. Politics

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Economics

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the study of or science of production, distribution, and consumption; it concerns itself with how wealth is created and managed in households, businesses, regions, and countries

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Real Gross Domestic Product (real GDP)

Back 18

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

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Inflation

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steady increase in prices

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Deflation

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indicates falling prices

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Business cycle

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the usual expansions and contractions in the economy

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Expansion

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period of prosperity, growth, higher output, low unemployment, and increased retail sales and housing starts

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Recession

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temporary moderate decline or downturn in the economy

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Recovery

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economic activity picks up and leads to expansion

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Scarcity

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a condition in which there is an insufficient amount or supply, a shortage

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Equilibrium price

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reach when supply and demand are equal

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Law of supply

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as the supply of a good or service goes up, the price comes down

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Law of demand

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as the price of a good or service rises, the quantity demanded of that good or service falls

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Risk

Back 29

the possibility or perception of harm, suffering, danger, or loss

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Loss Aversion

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a fear of loss

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Opportunity

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refers to a favorable outlook, a chance for progress, advancement, and action

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Opportunity cost

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on alternative is selected over another, and there is a cost attached to this choice

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Trade-offs

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to get something that is desired, it is necessary to sacrifice something else because of scarcity (of time, money, energy, etc.)

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Product

Back 34

anything a consumer acquires or perceives to need

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Market economy

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exchanges are controlled by marketplace forces of demand and supply rather than by outside forces such as government control

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Command or centrally planned economy

Back 36

most decisions about what, how, and for whom to produce are made by those who control the government

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Property rights

Back 37

the legal rights over the use, sale, and proceeds from a good or resource

Front 38

Consumer sovereignty

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refers to the premise that consumers decide which goods will survive and that producers cannot dictate consumer tastes

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Monopoly

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exists when there is only one producer and there is no substitute, such as there being only one airline or cruise ship line

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Price

Back 40

amount of money a person pays to buy or use a product

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Capitalism

Back 41

an economic system characterized by open competition in a free market

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Socialism

Back 42

an economic system in which the government (also referred to as the state) centrally plans, owns, and controls most of the capital and makes decisions about prices and quantities

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Communism

Back 43

is a social or economic system in which nearly all capital is collectively owned

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Consumer-mediated environment

Back 44

refers to the buying and selling over the Internet

Front 45

E-commerce

Back 45

term referring to exchange transactions that take place on the internet, such as the buying and selling of goods, services, and information
Two parts:
1. E-merchandise
2. E-finance

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Rational self-interest

Back 46

meaning that people make choices that will give them the greatest amount of satisfaction at a particular time based on information they have at their disposal

Front 47

Conspicuous consumption

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occurs when someone pays an extremely high price for a product for its prestige value, leading to a much higher demand than a simple price-demand relation would indicate

Front 48

Consumer movement

Back 48

refers to policies aimed at regulating products, services, methods, and standards of manufacturing, selling, and advertising in the interests of the buyer

Front 49

hucksterism

Back 49

the large promotion of foods

Front 50

Harvey Wiley

Back 50

-founder of the consumer movement
-pure food reformer
-encouraged the packaging of food to keep it clean

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Pure Food and Drug Act

Back 51

-1906
-first federal law in U.S. history specifically enacted to protect consumers

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Muckraker

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a term for writers, politicians, journalists, and public speakers who search out and expose political or commercial corruption

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Upton Sinclair

Back 53

wrote "The Jungle" to expose wrong-doing in the meatpacking industry

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Theodore Roosevelt

Back 54

-26th president of the U.S.
-champion of consumer rights and an anti-monopolist

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Antitrust laws

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prevent business monopolies and are aimed at establishing and maintaining competition so that consumers get fair prices as well as goods in adequate quantities

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Common law

Back 56

based on custom and is the unwritten system of law that is the foundation of both the English and U.S. legal systems
ex. The Sherman Anti-trust Act made monopoly and price fixing illegal

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Cease-and-desist order

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an administrative or judicial order forcing a business to cease "unfair or deceptive acts or practices"

Front 58

Interstate Commerce Act

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-1887
-Power to regulate commerce was reserved to the states

Front 59

Sherman Antitrust Act

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-1890
-It prohibits monopolies and price-fixing and encourages competition

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Pure Food and Drug Act

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-1906
-Prohibits adulteration of food and drugs and mislabeling of such sold in interstate commerce, requires disclosure of narcotics and alcohol contents on patent medicine labels, and prohibits manufacturers from claiming ingredients that are not present

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Meat Inspection Act

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-1906
-Provides for meat inspection; there had been an earlier act in 1891 that set up the Federal Meat Inspection Service

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Federal Trade Commission Act

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-1914
-Prohibits deceptive advertising and unfair and deceptive trade practices. This act was used in the battle against trusts. Examples of early trusts (combos of firms that got together to reduce competition and control supplies and/or prices in an industry or region) included sugar, whiskey, matches, and fuel.

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Depression

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characterized as a drastic and long-lasting decline in the economy, with high unemployment, falling prices, and decreasing business activity

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The 16th Amendment

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-1913
-allowed for the collection of income tax

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Economist John Maynard Keynes

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-The General Theory of Employment, Interest, and Money
-1936
-economic activity in a capitalist system is dependent upon entrepreneurs to make capital investments

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Franklin Delano Roosevelt

Back 66

-signed into law the 44 hour work week in 1938
-reduced it to 40 hours in 1941
-consumer activist who fought for better working conditions and product safety

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Economist John Kenneth Galbraith

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-"The Affluent Society"
-1958
-less emphasis on production and more emphasis on public service

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Pollution

Back 68

refers to any undesirable change in biological, chemical, or physical characteristics of air, land, or water that harms activities, health, or survival of living organisms

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Rachel Carson

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-1962
-"Silent Spring"
-considered the founder of the modern environmental movement
-advocated use of natural pests or deterrents rather than chemicals and questioned the soundness of runaway consumption

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Environmentalism

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defined as concern for the environment

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Kennedy's Consumer Bill of Rights

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1. the right to safety
2. the right to be heard
3. the right to choose
4. the right to information
-Later added by other presidents:
1. the right to a decent environment
2. the right to consumer education
3. the right to reasonable redress for physical damages suffered from using a product

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Ralph Nader

Back 72

-lifelong consumer activist
-"Unsafe at Any Speed" revolutionized car safety

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Bricks and clicks

Back 73

meaning a physical store and an online store

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Reasons for escalated mergers during the Bush administration

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1. Antitrust legislation was less enforced
2. Deregulation spread
3. Large companies benefitted from mergers
4. A weakened economy made smaller companies more vulnerable and willing to sell

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Rationality

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ability to reason

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Acquisitiveness

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a strong desire for things, ideas, and information

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Behavioral economics/behavioral finance/neuroeconomics

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"pushing the frontiers of research by introducing psychologically realistic models of economic agents into economic theory"

Front 78

Theory

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an organized system of ideas or beliefs that can be measured; essentially systems of principles or assumptions; useful in guiding research and explaining behavior

Front 79

Brand extension

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example: marketing Old Spice to men as a body wash so they don't have to use feminine soaps

Front 80

Exchange process

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occurs when people (as individuals, family members, employees, members of religious groups) negotiate with a goal of reaching an agreement, such as an agreed-on price or date of delivery

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Transaction

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when the exchange process is fulfilled

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Utility

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refers to the usefulness of a product, service, or idea

Front 83

Diminishing marginal utility

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means that in a given time period, a consumer will receive less satisfaction from each successive unit

Front 84

Theory of reasoned action

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-developed by Martin Fishbein and Icek Ajzen
-states that behavioral intentions are based on a combination of the attitude toward a specific behavior, the social or normative beliefs about the appropriateness of the behavior, and the motivation to comply with the normative beliefs
-what is important is the consumer's attitude toward behaving a certain way and the consumer's subjective norm

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Prospect theory

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explains choice under uncertainty and led to the idea of loss aversion. This idea holds that people feel more pain from loss than pleasure from profit

Front 86

Message framing

Back 86

"you will be happy if you buy this product", etc.

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Reactance

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a warning or negative message can act as a boomerang by making the risky behavior more attractive

Front 88

Endowment effect

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Richard Thaler found that subjects who have been given a present-a coffee mug-will demand a higher price to sell it than people who don't have the mug would be willing to pay for one

Front 89

Theory of mental accounting

Back 89

people frame or put into context their buying and selling

Front 90

Innovators

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earliest buyers of new brands, services, products, and store or other market offerings, and they like new ideas and technologies as well

Front 91

Models

Back 91

representations or schematics or illustrations of relationships

Front 92

Consumer-market conflict

Back 92

sometimes things go wrong

Front 93

Public policy

Back 93

plan or decision by government to act in a certain way or go in a particular direction, such as to keep products safe, open up competition, eliminate property, allocate more money to medical research or the space program, or clean up the environment

Front 94

Regional subcultures

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exist in the U.S. due to differences in the natural environment and resources, characteristics of immigrant groups and other social forces, including history and traditions

Front 95

Targeted advertising

Back 95

ex. dividing Texas into regions and using different Budweiser ads in different parts

Front 96

Technology

Back 96

application of scientific knowledge to useful purposes

Front 97

Technological obsolescence

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if a product becomes outdated soon after purchase or before it is worn out

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Media

Back 98

mass communication

Front 99

Quality of life

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a person's perception of and satisfaction with their lives

Front 100

Consumption

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refers to the using up of goods

Front 101

Level of living

Back 101

the way they are actually living

Front 102

Standard of living

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which is a certain quality of life one aspires to

Front 103

Lifestyle

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how one lives and includes patterns of time use and living space; also involves what one thinks is important and how one spends money

Front 104

Mass consumption

Back 104

when millions of consumers make similar choices

Front 105

Socialization

Back 105

refers to the process of learning to interact with others, forming cooperative relationships, participating in society, and learning the ways of daily life

Front 106

Human Development Index (HDI)

Back 106

-puts a number on well-being by combining several measures of human well-being
-compares the progress of nations by using the same measures of quality of life across the globe, and it uses an adjusted measure of real per capita gross domestic product (GDP)

Front 107

Consumer durables

Back 107

products bought by consumers that are expected to last three years or more and include automobiles, appliances, and furniture

Front 108

Consumer Price Index (CPI)

Back 108

measures prices each month of a fixed list ("market basket") of 400 goods and services (durables and nondurables) bought by a typical consumer
-"market basket": includes shelter, transportation, tires, utilities, entertainment, health care, clothing, and services

Front 109

Consumer Expenditure Survey

Back 109

national sample of 30,000 families that provides detailed information on spending habits

Front 110

Consumer Confidence

Back 110

Measured by two organizations:
1. Conference Board
2. Survey Research Center

Front 111

Consumer-in-control movement

Back 111

consumers want more say about products and services. They want to design ads, products, and packaging, send emails, and let others know about their input

Front 112

Customization

Back 112

specifically designed products such as shirts with logos or custom-made drapes and coordinating pillows in another fabric

Front 113

Market mavens

Back 113

opinion-leading consumers who are very involved in the marketplace

Front 114

Entrepreneurs

Back 114

pursue new business opportunities relentlessly without becoming deterred by the limited resources they initially controlled

Front 115

Judgment

Back 115

a balanced weighing up of evidence preparatory to making a decision. A formal process of evaluation applies.

Front 116

Attitude

Back 116

positive, negative, or neutral views of an "attitude object," i.e. a person, behavior, or event.
These come from judgments.

Front 117

ABC Model

Back 117

-Affect: physiological response to a person's preference
-Behavioral change - verbal indication
-Cognition: thinking evaluation to form an attitude

Front 118

What is a theory?

Back 118

Exploration, Description, Explanation, Model, Validation

Front 119

How would one validate a theory?

Back 119

Scientific method