AFM

Economics

1. Display knowledge of the concept of supply and demand

2. Distinguish between consumer wants and needs

3. Explain the concept of opportunity cost 4. Describe the concept of global opportunities

related to goods and services 5. Define characteristics of economies related

to government involvement

Globalization and FashionGlobalization – the increasing integration of

the world economy.countries no longer limited by their own

borders.technological advances – has helped improved

worldwide communication systems, such as the internet.

Global CompetitionGlobalization has created increased

competition between countries in the manufacturing sector of fashion.

labor is a major component of cost production.

countries with lower wages have an advantage over countries with higher wages.

International Fashions Technology has increased

communication around the world. Many companies place their orders over the

internet.Example: A garment in a boutique on Rodeo

Drive in Beverly Hills1. Produced in China with fabric from India and

buttons from Bali2. Designed by a designer in France3. Modeled on the runways in Milan, Italy, and

Paris, France.4. Purchased by a customer in New York City to

wear at a trendy party.

Supply and Demandsupply - the quantity of a product offered for

sale at all possible prices.demand – the consumer’s willingness and

ability to buy and/or use products.surplus – supply exceeds demandshortage - demand exceeds supplyequilibrium – supply equals demand

The Law of DemandStates:

if all other factors remain equal, the higher the price of a good, the less people will demand that good.

How much are consumers willing to pay?

The Law of SupplyDemonstrates the quantities that will be sold at

a certain price.

The higher the price, the higher the quantity supplied. Producers supply more at a higher price because selling a higher quantity at a higher price increases revenue.

Opportunity Costthe benefits you could have received by taking an alternative

action.

Example:The opportunity cost of going to college is the money you would

have earned if you worked instead. On the one hand, you lose four years of salary while getting your degree; on the other hand, you hope to earn more during your career, thanks to your education, to offset the lost wages.

Give an example of opportunity cost???????????????????????????????????????????

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Wants vs. NeedsWhat do consumers want?What do consumers need?

Difference?Examples?

http://www.mcwdn.org/ECONOMICS/NeedWant.html