Chapter 3 Notes

Section 1 – Consumption, Income & Decision Making

Consumer is a person/group that buys or uses g/s to satisfy ______and ______.

How much we spend depends on our income.

Income can be both discretionary or disposable

  • ______is income remaining for a person to spend or save after all taxes have been paid.
  • ______is money left to spend on extras after necessities have been bought. Often for luxury items or entertainment.

Our earning power depends on our ______, ______, ______, ______

Decision Making as a Consumer involves comparing available ______

Scarce resources used to make a purchase are ______and ______

Opportunity Cost – next choice (value of next alternative)

  • Example:

Rational Choice – alternative w/ greatest ______value (what do they mean by perceived)

Section 2 – Buying Principles & Strategies (there are 3)

1 – Gathering Info

Consumers should be well informed

Research products – how much time should you spend – value of time and effort should not be greater than the value you receive from making the best choice

Consumer knowledge base is ….

How to get the best deal

2 – Use Advertising Wisely

Competitive Advertising tries …

______gives consumers useful information on a product (click it or ticket)

______and ______is when they misrepresent a product to get you in the door, then try to sell you another better and more expensive product (this is illegal and deceptive)

#3 Comparison Shopping

Comparison shopping is getting information on prices and products from different stores

______– promise by manufacturer to repair or replace w/in certain time frame

______– word, picture or logo that distinguishes their product

______– no brand name, it is difficult to know who made the product

Section 3 – Consumerism

______is a movement from 1960s to educate buyers on their purchases and to demand better and safer products.

Consumer Rights – In 1962 President JFK sent first consumer protection message to congress outlining the following?

  • ______– protects against goods that are dangerous to health
  • ______– protection against fraud
  • ______– provides competition
  • ______– consumers have voice
  • ______– ability to get compensation from manufactures for damage by products (passed by Pres Richard Nixon)

Consumer Responsibilities

If product is faulty, it’s your responsibility to initiate the problem-solving process

There are private and gov’t agencies to help consumers

  • Example: ______

Beware of online shopping

  • Use reputable sites
  • Never give personal info to someone soliciting you

As consumers it’s our responsibility to exhibit ethical behavior.