non-consumption

Examples of non-consumption in the following topics:

• Public Goods

  • A public good is a good that is both non-excludable and non-rivalrous.
  • Pure public goods are those that are perfectly non-rivalrous in consumption and non-excludable.
  • It is non-excludable and non-rival in consumption.

• Defining GDP

  • "C" (consumption) is normally the largest GDP component in the economy, consisting of private expenditures (household final consumption expenditure) in the economy.
  • Personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services.
  • Two non-income adjustments are made to the sum of these categories to arrive at GDP:
  • Depreciation (or Capital Consumption Allowance) is added to get from net domestic product to gross domestic product.
  • Since wages eventually are used in consumption (C), the expenditure approach to calculating GDP focuses on the end consumption expenditure to avoid double counting.

• GDP Equation in Depth (C+I+G+X)

  • GDP is the sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X – M): Y = C + I + G + (X - M).
  • GDP (Y) is a sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X – M):
  • Consumption (C) is normally the largest GDP component in the economy, consisting of private (household final consumption expenditure) in the economy.
  • These personal expenditures fall under one of the following categories: durable goods, non-durable goods, and services.
  • Only expenditure based consumption is counted.

• Economic Activities

  • Production, distribution and consumption are clearly economic activities.
  • The consumption choices are often correlated with variables that can be measured.
  • Individuals value security, aesthetics, creativity, leisure, a sense of belonging, and other non-market phenomena.
  • The role of these things frequently arises in the allocation process because individuals may trade market goods for non-market values.
  • Production, distribution and consumption are interrelated.

• Consumption outcomes

  • Marginal propensity to consume measures induced consumption; marginal propensity to save measures increased saving due to increased disposable income.
  • In economics, the marginal propensity to consume (MPC) is an metric that quantifies induced consumption, the concept that the increase in consumer spending (consumption) occurs with an increase in disposable income (income after taxes and transfers).
  • The proportion of the disposable income that individuals desire to spend on consumption is known as the propensity to consume.
  • The easiest way to calculate MPC is to divide the increase in consumption by the increase in disposable income.
  • The marginal propensity to save (MPS) refers to the increase in saving (non-purchase of current goods and services) that results from an increase in income.

• The consumption function

  • The function is used to calculate the amount of total consumption in an economy.
  • Autonomous consumption (otherwise known as exogenous consumption) is consumption expenditure that occurs when income levels are zero.
  • Induced consumption is consumption expenditure by households on goods and services that varies with income.
  • C represents total consumption, while c0 represents autonomous consumption.
  • Since autonomous consumption never varies regardless of income, the slope of the consumption function is defined entirely by the marginal propensity to consume.

• Defining a Good

  • There are four types of goods in economics, which are defined based on excludability and rivalrousness in consumption.
  • The second is whether a good is rival in consumption: whether one person's use of the good reduces another person's ability to use it.
  • Club goods: Club goods are excludable but non-rival.
  • Public goods: Public goods are non-excludable and non-rival.
  • There are four categories of goods in economics, based on whether the goods are excludable and/or rivalrous in consumption.

• Defining Market Failure

  • Prior to market failure, the supply and demand within the market do not produce quantities of the goods where the price reflects the marginal benefit of consumption.
  • The imbalance causes allocative inefficiency, which is the over- or under-consumption of the good.
  • An externality is an effect on a third party which is caused by the production or consumption of a good or service .
  • For example, placing a ‘sin-tax' on tobacco products, and subsequently increasing the cost of tobacco consumption.
  • extension of property rights - creates privatization for certain non-private goods like lakes, rivers, and beaches to create a market for pollution.

• Absorption of Alcohol

  • The enzyme acetaldehyde dehydrogenase then converts the acetaldehyde into non-toxic acetic acid.
  • Alcohol in non-carbonated beverages is absorbed more slowly than alcohol in carbonated drinks.
  • Moderate alcohol consumption also increases the risk of liver disease.
  • An increase in frequency of alcohol consumption also was related to decreased risk.
  • Consumption of alcohol is unrelated to gallbladder disease.

• Confounding

  • A risk assessment that looks at the effects of smoking but does not control for alcohol consumption or diet may overestimate the risk of smoking.
  • When there is not a large sample population of non-smokers or non-drinkers in a particular occupation, the risk assessment may be biased towards finding a negative effect on health.
  • As an example, suppose that there is a statistical relationship between ice cream consumption and number of drowning deaths for a given period.
  • An individual might attempt to explain this correlation by inferring a causal relationship between the two variables (either that ice cream causes drowning, or that drowning causes ice cream consumption).
  • However, a more likely explanation is that the relationship between ice cream consumption and drowning is spurious and that a third, confounding, variable (the season) influences both variables: during the summer, warmer temperatures lead to increased ice cream consumption as well as more people swimming and, thus, more drowning deaths.