Transcript Economics in Fashion ppt

AFM
Economics
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Display knowledge of the concept of supply and
demand
Distinguish between consumer wants and needs
Explain the concept of opportunity cost
Describe the concept of global opportunities related
to goods and services
Define characteristics of economies related to
government involvement
Globalization and Fashion
 Globalization – 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 Competition
 Globalization 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
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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 Hills
1. Produced in China with fabric from India and buttons
from Bali
2. Designed by a designer in France
3. 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.
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Supply and Demand
 supply - 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 demand
 shortage - demand exceeds supply
 equilibrium – supply equals demand
The Law of Demand
 States:
 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 Supply
 Demonstrates 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 Cost
 the 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. Needs
 What do consumers want?
 What do consumers need?
 Difference?
 Examples?
 http://www.mcwdn.org/ECONOMICS/NeedWant.ht
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