Transcript Making Informed Consumer Choices

I
spent more money on
________ than anything else.
 The reason is …
1.
2.
3.
4.
If you were given $1,000 today, what
would you do with it?
Do you check your receipts to make
certain that you have been charged
correctly?
Do you count your change to make
certain that it is correct?
Do you compare different prices and
brands of the same item at more
than one store, then select the best
value to purchase?
5.
6.
7.
8.
9.
Do you compare the warranties of
different brands when selecting a
brand to purchase?
If you feel you have been wronged by
a business, do you complain to the
business and attempt to right the
wrong?
Do you find your self buying things
that you had not planned to buy?
Do you save money regularly?
Do you often find yourself borrowing
money from parents, friends or
siblings?
10. Do you keep a record of what you earn
and what you spend?
11. Do you shop sales?
12. Do you read the instructions for use
and care of a product and follow them?
13. Do you keep your sales receipts,
warranties, and instructions?
14. Do you read the store’s return and
exchange policy before making your
purchase?


On question #1, give yourself five points if you
selected something to do with your money that is
consistent with your goals and values in life.
Give yourself two points for each question you
answered as follows:
#2 Yes
#6 Yes
#10 Yes
#3 Yes
#7 No
#11 Yes
#4 Yes
#8 Yes
#12 Yes
#5 Yes
#9 No
#13 Yes
#14 Yes
25-31 points
19-24 points
14-18 points
Less than 14
Great! Keep up the good
work!
Fair. You should begin to
make some changes.
Not too good. Consider
making some big
changes.
Hope you took good
notes, you’ll need
them!!!

Scarcity
◦ Term used to indicate that no society has enough
resources to satisfy everyone’s wants and desires
at a zero price

Trade-Off
◦ That which has to be given up in order to get more
of something else. One trades off things for things,
money for things, time for time, and so on. Every
choice in a world of scarcity is a trade-off
•
•
•
We may be living tin the richest nation on
earth, but that doesn’t mean we have
unlimited, resources.
Every person, business, city , state and
country faces the problem, of scarcity:
No society has enough resources to satisfy
everyone’s wants and desires at a zero
price for those resources.
•
•
Even if your were the richest
person on earth, you would still
face scarcity
You would not have enough time
to do everything you want to do
because when you are doing one
thing, obviously you cannot be
doing another.
•
•
•
•
Scarcity forces us, as consumer , to
make choices all the time.
We must choose how we spend our time,
what type of work we do, and how we
spend our income.
You have to decide whether to purchase
an outfit this month or save the money for
a car.
Make a trade-off

Barter
◦ The exchange of goods or services without the use
of money
◦ For example: I give you two pencils for one eraser

Opportunity Cost
◦ The cost of doing something, measured by the
most valuable alternative you give up in spending
your time and/or money on a particular product or
activity
◦ For example: being in this class verses wages you
would receive if you were working for pay instead
 Supply
◦ As the price goes up, so does the
quantity supplied
◦ As the price goes down, so does the
quantity supplied
 Demand
◦ As the price rises, the quantity
demanded of goods and services will
fall
◦ As the price falls, the quantity
demanded will rise
 Ask yourself:
◦ How much work would I be willing to perform
after school at $1 per hour?
◦ At $5 per hour?
◦ At $100 per hour.
◦ Isn’t it true that you would be willing to supply
more of your labor at higher pay?


Consider the purchase of CDs, normally you
purchase two CDs per month and they cost $15
each.
If the price were to go up, and you continue to
by the CDs each month some point you would not
have any money left over to purchase food,
clothing or other types of entertainment.
 If
it is in RED you must
write it down
 Consumer
◦Individuals who purchase (or are
given), use, maintain, and
dispose of products and services
◦We are all consume—in one way
or another
 Exchange
◦ Giving of one thing for another
◦ Can take place among individuals and
among nations
◦ Typically you exchange your labor
services for money—income
◦ Then you exchange your money for
goods and services that you want to
purchase
Food and Drug Administration FDA:
• A Federal agency that was formed to set and enforce
safety standards for food, drugs, and cosmetics.
• They have the authority to stop the sale of an item
under their jurisdiction, if it is found to be harmful or
hazardous.
• They may also require safety warnings to be placed on
harmful or hazardous products.
• This is the agency which tests new drugs and
medications before they are put on the market.
Better Business Bureau
(BBB):
• A non-profit organization sponsored by local
businesses.
• It offers a variety of consumer services at no charge
to help with consumer complaints.
• It can provide consumer education materials, answer
consumer questions, and provide general information
about a company’s consumer complaint record
Consumer Product Safety
Commission (CPSC):
• A federal agency that was formed to set and enforce safety
standards of products such as household appliances, toys and
tools.
• If a product under the jurisdiction of the CPSC is found to be
harmful or hazardous, they can prevent that products from
being sold, or they can require the manufacturer to repair or
replace the product.
• The CPSC will also investigate complaints from consumers
about products.
Federal Trade
Commission (FTC):
• A federal agency which was formed
to protect consumers against false
advertising, illegal sales schemes,
and all unfair trade practices.
Bureau of Consumer
Protection:
• A federal agency which provides sate and local
consumer protection offices which help answer
consumer questions or problems.
• Many offices enforce consumer protection and fraud
laws.
• They can help resolve consumer complaints and
provide consumer education materials.
Monopoly
• A market situation in which only
one organization produces the
entire output of an industry or
sells a product or service for
which there is not substitute.
Service
• Work performed to meet the needs of those buying
the work, such as repair work, personal grooming
services, house cleaning, and transportation.
• This also includes the professional services of
doctors, lawyers, teachers, etc.
•
•
Something that is intended to satisfy
some wants or needs of a consumer
and thus has economic utility.
It is normally used in the plural
form—goods—to denote tangible
commodities such as products and
materials.
Needs
• The basic items a person must
have to survive.
Comparison Shopping
• Looking at different brands and models of the same
item in various stores to compare price, quality,
features, and store services before buying.
Second
• A product that does not meet the standard
requirements.
• It is sometimes labeled irregular and may contain
minor flaws of imperfections.
Name Brand
• A brand name that is widely recognized and sold in
many different stores.
• Because of extensive advertising, the name is
associated with quality..
Store Brand
• A brand owned by a particular store or chain of
stores.
• The store will either manufacture their own product
and put their name on it, or purchase the product
from a manufacturer with the right to place their
own name on the product.
• For example: Food Club Brand
Generic Brand
• Surplus products purchased form many different
manufacturers and then labeled with plain white
and black labels stating what the product is and
giving necessary information. Since the product
comes from many different manufactures, the
quality varies greatly.
Warranty
• A statement made by a manufacturer or seller of a
product or service concerning the responsibility for
quality, characteristics, and performance of the
product or service.
Full Warranty
• Repair or replacement must be free, in a
reasonable amount of time, without placing
unreasonable demands on the consumer.
Limited Warranty
• May require the consumer to pay labor fees or
handling charges and may require the consumer
to ship the product to the seller or an authorized
service dealer for repairs.
Implied Warranty of
Merchantability
• The product actually is what it is called and does
what its name implies.
Implied Warranty of
Fitness
• The product is fit for any performance or purpose
promised by the seller and that there are no
defects in the product at the point of sale.
Unfair Trade Practice:
• Any business practice which is considered unethical
or illegal.
 Consumption
of goods more for their
ability to impress others than for the
inherent satisfaction they yield
 Buying
and using consumer goods
ostentatiously
 Ostentation
= showy
◦ A way to reach decisions in which all
cost are added up , as well as all the
benefits.
◦ Rational consumer decision making