Trends in consumption patterns

Running Head : CONSUMPTION PATTERN

Trends in Consumption Pattern

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DEFINITIONS

Economics

Economics is defined as the study of production , distribution and consumption of wealth in human societies (Economist 's Dictionary of Economy . Economics is also a social science that studies human behavior (Purdue University Indianapolis . Economics can be used not only to predict individual behavior , but also the behavior of institutions and groups (Purdue University Indianapolis . Wikipedia citing Robbins (1935 ) defines Economics as a social science that studies human nature as a relationship between ends

and scarce means which have alternative uses

Mofatt (n .d ) defines Economics as the study of how individuals and groups make decisions with limited resources as to best satisfy their needs , wants and desires

Microeconomics

Microeconomics is defined as the study of economics at the level of individual consumers , groups of consumers , or firms (Economist 's Dictionary of Economy . It said to deal with the decision making and market results of consumers and firms (West Valley College . Moffatt citing Wikipedia (n .d ) defines Microeconomics as the study of the economic behaviour of individual consumers , firms , and industries and the distribution of individuals both as suppliers of labor and capital and as the ultimate consumers of the final product

Law of Supply

The Law of Supply is the microeconomic law stating that , all other factors being equal , as the price of a good or service increases , the quantity of goods or services offered by suppliers increases and vice versa (Investopedia , n .d

Ehrbar (n .d ) said that the Law of Supply states that the quantity of a good supplied (that is , the amount that owners or producers offer for sale ) rises as the market price rises , and falls as the price falls He also said the most economic phenomena are often explained by the interaction of this law with the Law of Demand

Law of Demand

The Law of Demand is the microeconomic law that states that , all other factors being equal , as the price of a good or service increases consumer demand for the good or service will decrease and vice versa (Investopedia , n .d

Ehrbar (n .d ) said that the Law of Demand states that the quantity of a good demanded falls as the price rises , and vice versa ' As mentioned above , the interaction of this law with the Law of Supply is used to explain or analyze most economic phenomena . The goal of the market is achieve equilibrium or the point in which supply and demand are equal (Ehrbar , n .d

Factors that Lead to Change in Supply

The following are factors that lead to changes in supply : changes in the price of substitute , expected changes in future prices , changes in fashion , changes in consumers preference or taste and changes in population . Other factors affecting supply are seasonal conditions changes in the cost of factors of production , scarcity or availability of the factors of production , and changes in the cost of producing other goods . As to the last factor , supply may...