Econ Test 1, Econ Final

The consumer movement is ____________

DIVERSE in goals, levels of Commitment, & social background of participants exhibits diversity on leadership -demographics (male/female/old/young) -preferred tactics and strategies (picketing, marching, boycotting -ideology(individual responsibilities vs. protection (liquor laws, smoking) -anti-government vs. pro-government (fewer law/more laws)

1893

Lucy Stone dies

first state to make children attend school 1852

Massachusetts

Muckrackers examples:

Mcclure's magazine (standard oil: bribery, fraud, violence.) Dr. Harvey Wiley - U.S. Dept. of Ag (food preservation, "poison squad" of volunteers who were fed food adulterant to see affects.

Adam Smith:

Author of "An Inquiry into the Nature and Causes of the Wealth of Nations" stated that "consumers act in their own self interest and markets work with the invisible hand. (1776) -founder of modern economics -felt consumers should be given freedom and authority to run their own economic affairs -The US's founding fathers liked the idea that wealth should be based on goods and services produced and consumed by consumers consumers will make the choice that will give them the most satisfaction

the consumption process

Awareness Thinking Planning Implementation Evaluating

Law of demand

if nothing else changes, consumers will buy a greater quantity of a product at a lower price than at a higher price.

Scarcity

implies choice and choice implies cost. means that society has limited resources and therefore cannot produce all the goods and services people wish to have.

Desire for technology

includes the methods and materials that individuals use to get what they want includes machines, techniques, material objects and processes.

1920's

incomes rose, advertising new products, purchasing unfamiliar consumer durables and foods

Consumers:

individuals and groups who obtain, use, maintain and dispose of goods, services to fulfill needs and increase satisfaction.

Esther Peterson

-workers' rights -equal pay for equal work -truth in advertising -nutrition labels and "sell before" labels for food production.

14th Amendment

(1) All persons born in the U.S. are citizens; (2) no person can be deprived of life, liberty or property without DUE PROCESS OF LAW; (3) no state can deprive a person of EQUAL PROTECTION of the laws. Second of three "Reconstruction Amendments" passed after Civil War. "NOR DENY TO ANY PERSONS WITHIN ITS JURISDICTION THE EQUAL PROTECTION OF THE LAWS" Anthony said that a new amendment was not needed, they needed to uphold this amendment.

Your Money's worth

(Chase & F.J. Schlink, 1927) called for product testing

Economics and decision making:

-unemployment rate -interest rate -inflation rate

Economic regulation

-ECONOMIC regulations regulate price, entry, exit & service of an industry

1906

-Legislature set the maximum hours of labor for children to 55 a week and adopted a list of dangerous occupations prohibited to children under 16

Social Regulation

-SOCIAL regulations address safety, employment, fairness, environmental quality, and other non-economic questions. -Examples: job discrimination, clean water/air acts.

Susan B Anthony

-a prominent American civil rights leader who played a pivotal role in the 19th century women's rights movement to introduce women's suffrage to the US

Pre-industrial and industrial revolution market place

-last four decades of the 19th century -rapid industrialization, nationwide markets -could no longer depend on past experience to judge goods; no information upon which to judge new goods entering marketplace -corruption in business and government; corporate schemes to eliminate competition; control prices.

The Consumer Movement contains:

-people who are motivated by economic issues and seek benefits for themselves. ex. NRA -people who are guided by moral concerns and pursue benefits for others. Ex. MADD economic and moral

1880 Monopolies:

-railroads (pacific railway company) -telephones (American Bell Telephone renamed....ATT in 1899)

Rational Self Interest: Rational Choice Theory

-the dominant theoretical paradigm in micro. -assumes individuals choose the best action according to stable preference functions and constraints facing them -although rationality cannot be directly empirically tested, empirical tests can be conducted on some of the results derived from models.

1933

100,000 guinea pigs: danger in everyday foods, drugs, and cosmetics (Kallet & Schlink) central argument propounds that the american population is being used as guinea pigs in a giant experiment undertaken by the american producers of food stuffs and patent medicines and the like.

Adam Smith writes the wealth of nations

1776 *America is trying to win independence* considered founder of modern economics

Child Labor Reform Dates:

1832 1836 1842 1881

First National Consumer's league

1898 focused mostly on worker conditions (mostly children)

Second era

1920 - 1930 ended by great depression

1936

American Chamber of Honors FDA exhibit of unsafe cosmetics and adulterated foods. FDA activities and FDR sent message to congress to strengthen good and drug administration (FDA)

1902

Elizabeth Cady dies

Second Era

Ended by WW2

1934

Federal Communications Commission: regulates communications by radio, television, wire, satellite, and cable. *Janet Jackson's wardrobe malfunction.

1938

Federal Food, Drug and Cosmetic Act - regulates product ingredients.

1938

Federal regulation of child labor achieved in Fair Labor Standards Act

Muckrackers (1906)

Journalists who wrote about corruption in business and politics in order to bring about reform. derived from Theodore Roosevelt's term. Thought they were sensational and irresponsible.

1887

Interstate Commerce Act - addresses the issues of railroad abuse and discrimination.

Reformers

Middle to upper class, formed the first Consumers League in 1891, "white list" of shops with reasonable hours and wages focused on local social problems and political corruption -modern day example: Angie's list

1832

New England unions condemn child labor

government sovereignty

Patient Protection and Affordable Care Act (aka ObamaCare) - goals of increasing the quality and affordability of health insurance Page 10

1906

Pure Food and Drug Act and Meat Inspection Act (first federal law in the US history specifically enacted to protect consumers.)

1872

Republican Party Platform made reference to Women's Suffrage

1848

The first women's rights meeting in the US, held at Seneca Falls, New York, in 1848, itself followed several decades of quietly emerging egalitarian spirit among women.

1890

Sherman Anti-Trust Act - prohibits trusts (concentration of economic power in large corporations)

1842

State begins limiting children's work days (10 hours only)

November, 1872

Susan B. Anthony and others attempt to vote and get arrested

1906

Susan B. Anthony dies

August 26th, 1920

The 19th Amendment to the US Constitution became law, and women could vote in the fall elections, including the presidential election

Regulating Drugs:

The Bayer Company sold heroin as a "superior cough suppressant" Merck (Germany) offered 800 different products in its catalogue including quinine, morphine, strychnine and codeine Edward Robinson Squibb, MD, founded a company to supply ether and chloroform to the US Navy

The consumer movement:

The US was founded on the free market system, however, by the late 19th century (we're now in the 21st) there were situations (e.g.) monopolies that led to the desire for consumer protection.

Consumerism:

The belief that goods give meaning to individuals and their roles in society. Ex. engagement ring is 3 month salary -how much of our decision making process is influenced by other's thoughts?

1937

The elixir SULFANILAMIDE disaster was a mass poisoning in the US. It caused the deaths of more than 100 people. Capsule form was safe, liquid was not. After this manufacturers had to test/prove drug safety.

1872

Victoria Woodhull runs for president (first woman to run for president) -later became a colorful and notorious symbol for women's rights, free love and labor reforms

conspicuous consumption

When a person pays an extremely high price for a product for its PRESTIGE VALUE leading to a much higher demand than a simple price.demand relationship would justify.

Ralph Nader

Wrote Unsafe at Any Speed, detailing his claims of resistance by car manufacturers t the introduction of safety features. brought attention to the lack of safety in American automobiles.

December 10th, 1869

Wyoming territory passed a law permitting women to vote (not many women here however)

1837

Young Teacher, susan B Anthony asked for equal pay for women teachers

Prestige:

a high standing achievement through success or influence or wealth, etc.

Children's rights movement

a historical and modern movement committed to the acknowledgement, and expansion of the rights of children around the world

Capitalism

a social system based on the recognition of individual rights -separated from economics (production and trade just like the state is separated from church. -being able to freely choose among a vast variety of commodities gives people a sense of freedom.

barriers to information (consumer report):

ability to acquire information ability to understand information biased information Essentially, ACQUIRE, UNDERSTAND AND BIAS

Orphan train

boys became factory workers and girls became prostitutes.

implementing

buying You actually sit down at the computer and surf the web for the best price of the product.

Why include cosmetics?

countless beauty mavens suffered serious health problems thanks to killer cosmetic like "lash lure" an aniline eye lash due introduced in the 1930's that caused 16 cases of blindness and one death and Koremlu, a depilatory cream of the same era that contained rat poison

Monopoly

defined as a a persistent market situation where there is only one provider of a product or service, no competitors. -do not protect consumers -take choice out of consumer's hands -do not have to provide good/safe/equitable products.

First era was ended by

economic hardship, WW1

Factors that influence consumers

economics history consumer culture individual traits physiological needs desire for technology political area, ex. government standards

Examples of at-risk consumers

elderly - nursing home abuse youth - students falling prey to scams poor - have little to nothing yet are targeted by those less well off than they are Rich - oprah's lost relatives

1836

first state child labor law

Lucy Stone

first woman in MA to achieve college degree, first woman to marry and keep her own last name

Consumer Research (CR) group

formed by Schlink to do product research

Thinking

gather information the mental exploration of the possibilities: weighing pros and cons and gathering information about the product in question random set of thoughts

Consumer reports do not take advertising

good for 6th grade level of education rests largely on information consumers with good information vote intelligently with their dollars.

goods vs services

goods are tangible services are intangible

John Kenneth Galbraith

known for his liberal views. Wrote THE AFFLUENT SOCIETY, called for less emphasis on production and more on public service. He was a key advisor to JFK and was a friend of Esther Peterson, who later became the first special assistant for consumer affairs to PREsident Johnson. Advertising became more pervasive with the advent of television.

First Era:

late 1800-early 1900s 1898 First National Consumer's league focused mostly on worker conditions

Elizabeth Cady Stanton

married abolitionist Henry Brewster Stanton in 1840, she'd already observed enough about the legal relationship between men and women to insist that the word "obey" be dropped from the ceremony.

1881

newly formed AFL supports state minimum age laws (14 years)

Material resources

non human

human resources

personal characteristics, physical characteristics.

Maslow's Hierarchy of Needs

physical: have to have safety: shelter, guns relational: friends, touching Esteem: facebook, interacting Self Actualization

The consumer movement defined

policies aimed at REGULATING products, services, methods and standards of manufacture, selling and advertising in the interest of the buyer. -consumer activists demanded safe, reasonable priced, and accurately labeled products, along with the right to complain and be satisfied with products.

political arena

politics affect our economic decision making

Primary goal of the consumer movement:

primary goal of the movement to advance EFFICIENCY and EQUITY in the marketplace.

producer sovereignty

producers have the power to decide which products and services society will produce and consume

not all consumption is ___________

rational

Consumer culture

refers to patterns of human activity and the symbolic structures that give activity significance the way people live in accordance to beliefs, language, history, or dress culture includes the groups in which an individual or family resides and their behaviors/traditions.

Planning

shopping around deciding ordered steps of action needed to make the purchase a reality planning on taking $50 from each pay check to pay for it planning the date you will have the $ Making a plan to get to the store/or on the internet to make a purchase

History

the background of history of each person and the area influences their decision. Ex. confederate flags in Iowa / scottish tattoo

Needs

the barest minimum physical necessities that allow you to survive

Economics

the study/science of production, distribution and consumption (Goldsmith) The study of how society manages its scarce resources (Miller)

resources:

things used to produce other things to satisfy needs and wants.

physiological needs

thirst hunger safety housing protection

how do we protect consumers?

through consumer POLICIES Government sponsored policies education is a key tool to prevent consumer injury

Buying G/S is an act of trust

true, b/c we assume our purchases will increase our satisfaction, however we are not always satisfied. Caveat: Ford explorer and Firestone tires

satisfaction

utility, well-being

Awareness:

what are needs and wants a stimulus lets us know that something is needed or desired A broken computer makes us aware another one is needed Your friends PS4 game system purchase makes you aware you want one

wants

what people would buy if their incomes were unlimited

Two at risk groups:

women & children

evaluating

would you re-purchase? Spend time reflecting Did you achieve the level of satisfaction?

Upton Sinclair

wrote "The Jungle", that portrays the dangerous and unhealthy conditions prevalent in the meat packing industry at that time. Theo Roosevelt threw support behind Meat Inspection Act.