Understanding Consumption

Flashcards covering the definition of consumption, key economic theories, and factors affecting consumer behavior based on the provided lecture notes.

What is the definition of consumption (pagkonsumo)?

The purchase and use of products or services to attain benefits as a response to human needs and wants.

According to Adam Smith in his book "An Inquiry into the Nature and Causes of the Wealth of Nations," what is the primary goal of production?

The primary goal of production is the consumption of the people.

How does the change in price (Pagbabago ng Presyo) typically affect consumption?

Consumption is higher when prices are low and lower when prices are high, as consumers tend to buy more when products are affordable.

How does income (Kita) relate to consumption according to John Maynard Keynes?

As a person's income increases, their capacity to consume products and services also increases; conversely, a decrease in income means a decrease in consumption capacity.

What is the title and publication year of the book by John Maynard Keynes mentioned in the text?

"The General Theory of Employment, Interest, and Money," published in 1936.

How do expectations (Mga Inaasahan) about the future affect current consumption?

If people expect a supply shortage or a future calamity, current consumption increases; if they have positive views like an upcoming bonus, consumption may also rise early.

How does debt (Pagkakautang) influence a person's ability to consume?

High debt lowers consumption because a portion of money is allocated for repayments, whereas low debt increases the capacity to buy products or services.

What is the 'Demonstration Effect' in the context of consumption?

It occurs when people are easily influenced by advertisements on radio, television, newspapers, or social media, leading them to imitate others and increase their consumption.