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Chapter Menu Chapter Introduction Section 1:Section 1:Consumption, Income, and Decision Making Section 2:Section 2:Buying Principles and Strategies Section 3:Section 3:Consumerism Visual Summary

Chapter Intro 1 Buyers and sellers voluntarily interact in markets, and market prices are set by the interaction of demand and supply.

Chapter Intro 2 Think about how you spend your money on things such as transportation, entertainment, food, and clothing. How do you make these economic choices? In this chapter, read to learn about what it means to be a consumer and make rational consumer choices.

Chapter Preview-End

Section 1-Main Idea Section Preview In this section, you will learn about factors that influence you as a consumer and how to make rational consumer decisions.

Section 1-Key Terms consumer disposable income discretionary income rational choice Content Vocabulary

Section 1-Key Terms region perceive Academic Vocabulary

A.A B.B C.C Section 1-Polling Question How much of a role does shopping play in your life? A.A huge role B.A moderate role C.A small role

Section 1 Disposable and Discretionary Income After people pay taxes, their remaining income may be saved or spent on essential or nonessential items.

Section 1 Disposable and Discretionary Income (cont.) Consumers play an important role in the economic system.Consumers Your ability to consume depends on available income and if you choose to spend.

Section 1 Disposable and Discretionary Income (cont.) Two types of income: –DisposableDisposable –DiscretionaryDiscretionary Education, occupation, experience, location, and health can all make differences in a person’s earning power and consumption. View: Earning PowerEarning Power

A.A B.B Section 1 Food and housing would fall under which type of income? A.Disposable B.Discretionary

Section 1 Decision Making as a Consumer Consumer decisions involve comparing available alternatives.

Section 1 Decision Making as a Consumer (cont.) After you have decided to make a purchase, at least two scarce resources are involved—income and time. Almost all the steps in consumer decision making, like the choices represented in the graph, involve an opportunity cost. View: Consumer SpendingConsumer Spending

Section 1 Decision Making as a Consumer (cont.) When you make consumer decisions based on opportunity cost, you engage in rational choice. A rational choice is one that generates the greatest perceived value for any given expenditure. rational choice

A.A B.B C.C D.D Section 1 What do Americans spend the least amount of money on? A.Entertainment B.Transportation C.Clothing D.Health care

Section 1-End

Section 2-Main Idea Section Preview In this section, you will learn the three basic buying principles that will help you to make effective consumer choices.

Section 2-Key Terms competitive advertising informative advertising bait and switch comparison shopping warranty brand name generic brand Content Vocabulary

Section 2-Objectives principle accurate similar Academic Vocabulary

A.A B.B C.C Section 2-Polling Question Do you feel that you have enough time to make wise shopping decisions? A.Always B.Sometimes C.Never

Section 2 Gathering Information Consumers should be well informed before making a purchase.

Section 2 Gathering Information (cont.) Shopping tips: –You should obtain only as much information as is worthwhile. –Ask salespeople for accurate information.

Section 2 Gathering Information (cont.) –Use a standard search engine on the Internet, and visit various sites in order to compare different information. –Read reviews other people have written about different brands and models of the product.

A.A B.B C.C Section 2 Is the Internet helpful to you when it comes to shopping? A.Most definitely B.Some of the time C.Never

Section 2 Using Advertising Wisely Consumers should carefully consider the claims of advertisers.

Section 2 Using Advertising Wisely (cont.) Two types of advertising: –CompetitiveCompetitive –InformativeInformative

Section 2 Using Advertising Wisely (cont.) Beware of false advertising like the bait and switch which is deceptive and illegal.bait and switch

A.A B.B Section 2 Which type of advertisement concentrates on appealing to peoples’ emotions? A.Competitive B.Informative

Section 2 Comparison Shopping The best price for an item can be found through comparison shopping.

Section 2 Comparison Shopping (cont.) It is generally worthwhile to do comparison shopping, although it can be time consuming. comparison shopping

Section 2 Comparison Shopping (cont.) Tips: –Read newspaper advertisements –Make telephone calls –Browse the Web –Visit different stores –Talk with friends

Section 2 Comparison Shopping (cont.) Don’t forget to find out which stores offer the best warranty if a product is found to be faulty.warranty Consumers sometimes choose between a brand name and a generic product. Brand name is a word, picture, or logo on a product that helps consumers distinguish it from similar products.Brand name

Section 2 Comparison Shopping (cont.) A generic brand has a general name for a product and it is difficult to know who manufactured the product.generic brand

A.A B.B C.C D.D Section 2 In general, how big do you think the difference is between brand name and generic products? A.A huge difference B.A moderate difference C.A small difference D.None at all

Section 2-End

Section 3-Main Idea Section Preview In this section, you will learn about your rights and responsibilities as a consumer.

Section 3-Key Terms consumerism ethical behavior Content Vocabulary

Section 3-Objectives assume guarantee Academic Vocabulary

A.A B.B C.C Section 3-Polling Question Are you aware of your consumer rights and responsibilities? A.Yes B.Somewhat C.Not at all

Section 3 Consumer Rights Legislative protection of consumer rights has grown steadily since the 1960s.

Section 3 Consumer Rights (cont.) Consumerism is a movement that started in the 1960s to educate buyers about the purchases they make and to demand better and safer products from manufacturers.Consumerism

Section 3 Consumer Rights (cont.) In 1962, President John F. Kennedy outlined four consumer rights: –The right to safety. –The right to be informed. –The right to choose. –The right to be heard.

Section 3 Consumer Rights (cont.) President Richard Nixon added the fifth right: –The right to redress.

A.A B.B C.C D.D E.E Section 3 Which right do you think is most important to you as a consumer? A.Safety B.Information C.Choice D. Voicing your opinion E. Redress

Section 3 Consumer Responsibilities Consumers can resolve problems most effectively by accepting certain responsibilities.

Section 3 Consumer Responsibilities (cont.) If a product or service is faulty, it is the consumer’s responsibility to initiate the problem-solving process. View: The Consumer’s RoleThe Consumer’s Role

Section 3 Consumer Responsibilities (cont.) If you choose to shop online, make sure you: –Buy from a reputable, trustworthy source. –Read any confidentiality and disclosure agreements. –Never enter your personal and financial information into a link that was sent to you by a business or company.

Section 3 Consumer Responsibilities (cont.) Consumers should also exhibit ethical behavior by respecting rights of producers and sellers.ethical behavior

A.A B.B C.C Section 3 Do you agree with your responsibilities as a consumer? A.Definitely B.Somewhat C.Not really

Section 3-End

VS 1 Consumer decision making deals with consumers’ choices about how to spend their income.

VS 2 Before making purchases, especially of big- ticket items, consumers should gather information and compare products from different sources.

VS 3 In the United States, consumer rights are protected by congressional legislation. Along with these rights, though, come consumer responsibilities. Savvy consumers are aware of both and seek a balance between the two.

VS-End

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Vocab1 consumer: any person or group that buys or uses goods and services to satisfy personal needs and wants

Vocab2 disposable income: income remaining for a person to spend or save after all taxes have been paid

Vocab3 discretionary income: money income a person has left to spend on extras after necessities have been bought

Vocab4 rational choice: choosing the alternative that has the greatest value from among comparable-quality products

Vocab5 competitive advertising: advertising that attempts to persuade consumers that a product is different from and superior to any other

Vocab6 informative advertising: advertising that benefits consumers by providing useful information about a product

Vocab7 bait and switch: ad that attracts consumers with a low-priced product, then tries to sell them a higher-priced product

Vocab8 comparison shopping: getting information on the types and prices of products available from different stores and companies

Vocab9 warranty: promise made by a manufacturer or a seller to repair or replace a product within a certain time period if it is found to be faulty

Vocab10 brand name: word, picture, or logo on a product that helps consumers distinguish it from similar products

Vocab11 generic brand: general name for a product rather than a specific brand name given by the manufacturer

Vocab12 consumerism: movement to educate buyers about the purchases they make and to demand better and safer products from manufacturers

Vocab13 ethical behavior: acting in accordance with moral convictions about right and wrong

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