Consumers, Producers & Cost-of-Living Decisions

Vocabulary flashcards covering consumer–producer relationships, economic actors, and real-life cost-of-living choices in New Zealand.

Consumer

An individual or household that buys and uses goods or services produced by firms.

Producer (Firm)

An organisation that creates goods or services and sells them to households or other firms.

Economic Cycle

The continuous flow of money and resources between consumers and producers.

Stakeholder Group

Any party—such as households, firms, government, NGOs—affected by or influencing economic activity.

Government (in the marketplace)

An "awkward" third party that generally avoids direct interference with the consumer-producer flow but can regulate or tax.

Reserve Bank

The institution that sets the ‘price of money’ (interest rates) within an economy.

NGO (Non-Governmental Organisation)

A nonprofit group that can influence economic and social outcomes without seeking profit.

Prosumer

A person or entity that both produces and consumes value, blurring the line between producer and consumer.

Input (to production)

Resources—labour, capital, information—supplied by consumers or other firms to enable production.

Output

Goods or services produced by firms and sold to households or other firms.

Margin

The difference between a firm’s revenue and its costs, often described as ‘money in the back pocket.’

Externality

An unintended side effect of production or consumption that affects third parties (e.g., environmental damage from mass production).

Cost-of-Living

The expenses required to maintain a certain standard of living; currently high for young families in NZ’s recession.

Quality vs. Quantity Dilemma

The consumer choice between buying fewer high-quality items or more low-quality ones, intensified by tight budgets.