It takes money to obtain and to produce goods and services. Most consumers, people who use goods and services, simply do not have enough money to buy everything that they want. Likewise, producers have limited money and materials with which to make choices about what they will produce. This is why decision-making is the heart of economics.

Consumers communicate their wants to producers as they purchase or fail to purchase goods and services. In this way, consumers are casting dollar, or economic, “votes” to let producers know their wants. They are voting for the product that they decide to buy and against the others. Through their buying or not buying, they can control what goods and services will be produced and even how much will be charged for them. For example, Apple discontinued the use of a “home” button in iPhones because people wanted a bigger phone screen and because the buttons wore down over time due to repeated use. You can read about Apple’s evolving iPhone products in this article by Chaim Gartenberg, “Apple’s Now-Defunct Home Button Is a Reminder That Even the Best Buttons Can Fail.”

Can you think of some other products that are no longer produced because consumers don’t want to purchase them anymore? As you can see, the money that consumers spend on goods and services spins the wheels of the economy.

Producers must keep in mind that people buy goods and services to satisfy their wants. Companies devote a great deal of time and money to finding out exactly what consumers want—this is called market research. They know that their success depends on keeping a careful eye on what sells and what doesn’t sell so that they can focus their limited resources on satisfying consumers’ economic wants. If consumers do not want a certain product, its production will be cut back or stopped. On the other hand, if a product is very popular, more producers will begin to make it.

What happens if consumers decide not to purchase anything but necessities? When consumers fail to buy, the influence is ultimately felt throughout the economy. Jobs are lost in retail and wholesale businesses. This forces producers to lay off additional workers. Consumers who lose their jobs are able to satisfy fewer wants because of decreased income. Thus, the decisions of consumers to buy or not to buy play a significant role in determining the health of the economy.