Consumer Economics Chapter 1 Test

life span

Your life from birth to death

wants

can live without; don't have to have

needs

goods/ services vital for life

Market economy

economic system without government involvement

puffery

innocent exaggeration

deceptive advertising

advertising deliberately designed to mislead

impulse purchase

purchase made on a whim

command economy

economic system where the government tells you what to produce

traditional economy

economic system where habit and custom determine what is produced - tribe is an example

mixed economy

economic system that is a combination of market and command

supply

quantity of products that PRODUCERS are willing and able to provide

demand

quantity of products that CONSUMERS are willing and able to buy

comparative advertising

advertising that compares its products to other products

persuasive advertising

advertising that is designed to appeal to your emotions

equilibrium price

when the quantity demanded and the quantity supplied meet

informative advertising

advertising that provides information to help you make a good buying decision

goals

important things you want to achieve in your life span

opportunity cost

the value of your next best alternative when you make a choice

resources

raw materials and equipment used to produce goods and services

consumer economics

the study of the role consumers play in an economic system

human resources

resources like knowledge, skill that people posess

nonhuman resources

raw materials and tools used in production

specify

this part of the decision making process asks the buyer to list what they want

search

this part of the decision making process asks the buyer to gather more information about a product

study

this part of the decision making process asks the buyer to evaluate their purchase

increase in demand

demand curve moves to the right

decrease in demand

demand curve moves to the left

increase in supply

supply curve moves to the right

decrease in supply

supply curve moves to the left

surplus

occurs at price above equilibrium

shortage

occurs at prices below equilibrium