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Economic Concepts and Trends in Consumption Patterns

Using the Internet, and/or other sources of literature, locate an article concerning trends in consumption patterns. Prepare a 1,050-1,400-word paper in which you:

- Define Economics
- Define Microeconomics
- Define Law of Supply
- Define Law of Demand
- Identify the factors that lead to a change in supply and a change in demand

Analyze the basis for the trends in consumption patterns as discussed in the article. In your analysis, consider the utility derived from the products mentioned in the article, describe what has occurred to change the demand for, or the supply of, the good or service, and market prices of those products or services. Cite your references appropriately. If you used an electronic source, include the URL. Format your paper according to APA standards. Make sure all aspects are covered in the paper.

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Solution Preview

The American Economic Association defines Economics as:

Economics is the study of how people choose to use resources.
Resources include the time and talent people have available, the land, buildings, equipment, and other tools on hand, and the knowledge of how to combine them to create useful products and services.
Important choices involve how much time to devote to work, to school, and to leisure, how many dollars to spend and how many to save, how to combine resources to produce goods and services, and how to vote and shape the level of taxes and the role of government.

Often, people appear to use their resources to improve their well-being. Well-being includes the satisfaction people gain from the products and services they choose to consume, from their time spent in leisure and with family and community as well as in jobs, and the security and services provided by effective governments. Sometimes, however, people appear to use their resources in ways that don't improve their well-being.

In short, economics includes the study of labor, land, and investments, of money, income, and production, and of taxes and government expenditures. Economists seek to measure well-being, to learn how well-being may increase over time, and to evaluate the well-being of the rich and the poor. Although the behavior of individuals is important, economics also addresses the collective behavior of businesses and industries, governments and countries, and the globe as a whole. Microeconomics starts by thinking about how individuals make decisions. Macroeconomics considers aggregate outcomes. The two points of view are essential in understanding most economic phenomena.

American Economic Association, "What is Economics?", http://www.aeaweb.org/students/WhatIsEconomics.php, accessed on 6/30/2011

- Define Microeconomics:
Roughly speaking, microeconomics deals with economics decisions made at a low, or micro, level. More precisely, I would define microeconomics as "the analysis of the decisions made by individuals and groups, the factors that affect those decisions, and how those decisions effect others".

Microeconomic decisions by both firms and individuals are motivated by cost and benefit considerations. Costs can be either in terms of financial costs such as average fixed costs and total variable costs or they can be in terms of opportunity costs, which consider alternatives foregone.

Microeconomists consider questions such as "What determines how much a consumer will save?", "How much should a firm produce, given the strategies their competitors are ...

Solution Summary

This solution is comprised of a detailed account on the concepts of economics, microeconomics, law of supply, and law of demand. All of this is completed in just under 1700 words and references are included.