Economics
Role of consumers:
- consumers: all individ.s in ec. that consume goods and services to satisfy needs and wants - consumer sovereignty: refers to the fact that patterns of consumers spending determine patterns of production. Through spending dec. consumers express their preferences.
Factors influencing individual consumer choice:
Income: disposable income – after tax (main determinant on consumer spending) More income, more demand for good and services But APS will rise as income rises.
Price: spending decisions according to relative prices of g-and-s Demand inverse relationship with price
Price of Substitutes: substitutes: Those used in place of other products eg. Generic brands As the price of one rises, a consumer may switch to a substitute as it is cheaper
Price of Complements: complements: those used in conjunction with other g-and-s. car Car and petrol If one good rises, demand falls for that good and its complement Complement determine demand vica versa
Preferences and Tastes: each individual is diff., have diff. tastes. Eg. Like blue over pink Seasonal and fashion. Scarves and hats in winter.
Advertising: it’s the dissemination of info or images about a product or service. Designed to influence by persuasion or image Informative: gives info of product, price, quality and features Persuasive: builds brand loyalty, by presenting an image or non-physical attribute of prod.
Sources of Income:
Variety of sources mainly as a return from factors of prod. And also as social welfare.
Returns to factors of prod: - Wages from labour: main source - In market ec. Time spent or level of skill contributed to production determines level of pay – more time spent, higher the salary Inclu: non-wage income eg. Super, workers comp.
Rent: from land
Interest: from capital (investment is buying more capital)
Profit: from
- consumers: all individ.s in ec. that consume goods and services to satisfy needs and wants - consumer sovereignty: refers to the fact that patterns of consumers spending determine patterns of production. Through spending dec. consumers express their preferences.
Factors influencing individual consumer choice:
Income: disposable income – after tax (main determinant on consumer spending) More income, more demand for good and services But APS will rise as income rises.
Price: spending decisions according to relative prices of g-and-s Demand inverse relationship with price
Price of Substitutes: substitutes: Those used in place of other products eg. Generic brands As the price of one rises, a consumer may switch to a substitute as it is cheaper
Price of Complements: complements: those used in conjunction with other g-and-s. car Car and petrol If one good rises, demand falls for that good and its complement Complement determine demand vica versa
Preferences and Tastes: each individual is diff., have diff. tastes. Eg. Like blue over pink Seasonal and fashion. Scarves and hats in winter.
Advertising: it’s the dissemination of info or images about a product or service. Designed to influence by persuasion or image Informative: gives info of product, price, quality and features Persuasive: builds brand loyalty, by presenting an image or non-physical attribute of prod.
Sources of Income:
Variety of sources mainly as a return from factors of prod. And also as social welfare.
Returns to factors of prod: - Wages from labour: main source - In market ec. Time spent or level of skill contributed to production determines level of pay – more time spent, higher the salary Inclu: non-wage income eg. Super, workers comp.
Rent: from land
Interest: from capital (investment is buying more capital)
Profit: from