consumers ed part 1

Supply

refers to the quantity of goods and services that the sellers can sell. when the price of a good rises, the quantity supplied of that good also rises, and when the price falls, the quantity supplied falls as well.

Globalization

a process of interaction and integration among people, businesses, and governments of different countries. It is driven by trade, investment, and information technology. has affected the culture, environment, technology, and lifestyles of consumers across the globe. Impact on culture: Impact on lifestyle Impact on environment: Impact on technology:

A recession

a slowdown in economic activity (production and consumption). A decline in the economic growth for two consecutive quarters depicts recession in that economy. Declining economic growth leads to a fall in gross domestic product (GDP) of the economy. Because consumption has decreased, a fall in GDP results in higher unemployment, which in turn leads to financial hardships.

Outsourcing

a strategy used to reduce production costs by contracting some portions of the business activities to other businesses. It has led to loss of jobs from the developed nations to the developing nations.

economy

a system that facilitates the production and consumption decisions in a society. n every society, the companies or the businesses decide what items to produce and sell, and the consumers decide what items to buy.

Intangible:

Services are intangible in nature. They cannot be touched or felt. It is easy to measure the quantity of goods. But the efforts for giving service to the consumer cannot be measured from the consumer end.

Endorsements

Some advertisements may use celebrity endorsements of products to induce popularity of the product among consumers

Vague claims

Sometimes, you can find ads making vague claims. For example, you may see shampoo ads that portray the effectiveness of the product by claiming that its use reduces hair loss

Atomic Energy Act:

The Act established the Atomic Energy Commission (AEC) to ensure that atomic energy was used for peaceful purposes to the maximum extent.

Clean Water Act:

The Act establishes the framework to control the release of waste into water bodies. It outlines measures to maintain the quality of surface water in water resources.

Clean Air Act:

The Act puts forth regulations to control air emissions from various sources, whether stationary or in motion. The Act maintains that all vehicles should conform to the relevant federal emission standards set to control air pollution.

Consumer Product Safety Commission

The CPSC protects the public from severe harm resulting from the use of certain products. These products include those that pose a threat of fire, hazards to children, and chemical poisoning.

The Federal Food, Drug, and Cosmetic Act

allows the FDA to ask for substantial proof of safety of new drugs from the manufacturers. It authorizes the FDA to carry out factory inspections and set standards for food quality. Nutrition Labeling and Education Act The Kefauver-Harris Amendments

Resources

any factors used in producing goods and services. Every society has its own resources. The quantity of these resources may vary across societies, but all societies have them. A society functions smoothly if all the resources are allocated efficiently. However, resources are limited. Therefore, individuals, businesses, and the government have to decide how to use these scarce resources in an efficient way.

Indirect advertising

Using to this technique, the product is shown in popular television shows as used by important characters. This technique helps the manufacturer grab the viewer's attention in a positive manner.

Surface water contamination:

Water pollution causes harm to the ecosystem surviving in water. It also poses hazards to animals and other living beings who consume water from these polluted resources.

interest rates

When interest rates are high, people save more and spend less in order to receive more returns. However, when interest rates are low, people prefer spending rather than saving. When people are willing to spend more, demand increases. As demand increases, producers will employ more labor to produce more.

Promotional advertising:

You can advertise new variants of your existing products using promotional advertising. You can also offer discounts or show improvement in the quality of your product to attract more customers.

Federal Trade Commission

a federal agency established in 1914 to investigate and stop unfair business practices

Federal Trade Commission (FTC):

a government agency that protects consumers and promotes competition by preventing unfair business practices, suing companies that violate the law, and collecting consumer complaints against companies.

Public goods

are non-excludable and non-rival in consumption. benefit everyone, especially in the geographic area when they are produced, irrespective of whether those people pay for it or not. People cannot be stopped from using these public goods.

Consumer Product Safety Act (CSPCA):

gave the agency the power to recommend recalls and ban products when they present a health or injury risk to consumers.

Trade

has a direct impact on the economy as well. The volume of imports and exports affects the economic well-being of a country. International trade is important not just for the United States but for all countries. International trade helps to create employment opportunities and reduces poverty.

Poison Prevention Packaging Act

he PPPA was enacted in 1970. It requires many products to be packaged with child-resistant packaging to prevent accidental poisoning. Products include prescription drugs and pesticides.

Truth in Lending Act

he TILA protects consumers against inaccurate and unfair practices from credit card companies and lenders. Consumers must have clear and accurate information in order to compare interest rates, fees, and other features of the financial product with competing lenders and credit card offerers.

the law of demand

other things being equal, the quantity demanded falls as the price rises and the quantity demanded rises as the price falls.

Sherman Act

passed in 1890 to preserve competition. Its purpose is to prevent monopolies and conspiracies from fixing prices, fixing bids, or dividing a market between competitors.

Entrepreneurship

people who invent products or ideas. They combine the three factors of production. Entrepreneurs face risk and uncertainty and invest their money and energy to develop business.

Consumer programs

present accurate information mediate consumer complaints prosecute offenders issue professional licenses that help maintain industry standards When consumers run into problems with corporations, consumer programs are available to help.

Federal Trade Commission Act:

prevent unfair or deceptive business practices.

Goods

products that have to be produced, stored, transported, marketed, and sold. They are tangible products. They can be used once or repeatedly.

Clayton Act:

, addresses specific practices that the Sherman Act does not cover. They include mergers and people in the position of making business decisions for more than one business in the same market.

Commercial banks:

: Banks offer a wide variety of services for borrowers and lenders. They are the largest type of financial institution in the United States.

Contracts

A contract is an agreement that is enforceable by law. A contract binding for both parties involved needs to include the following.

Bilateral contract

According to this form of contract, two or more parties enter into a contract by promising to fulfill the requested action.

Consumer Financial Protection Bureau

An independent bureau within the Federal Reserve that helps consumers make financial decisions.

Right to information

Consumers have a right to access to pertinent information about a product to make informed decisions. Additionally, consumers have the right not to be misled by advertisements, labeling, and other practices companies use to market products.

Right to safety

Consumers have a right to safety. Food, toys, and various chemicals should all be manufactured and marketed to protect consumers from harm.

Right to be heard

Consumers have the right to fair treatment and speedy resolution of grievances. Companies are required to consider the welfare of consumers when manufacturing, marketing, and selling products and services. They are also required to respond to and resolve customer complaints with fairness and professionalism.

Capital resources

Capital resources are the man-made factors that aid the production and consumption process. They include machinery, tools, buildings, and so on.

Direct Marketing

Companies use direct marketing to inform target audiences about a product or service. Direct marketing involves directly calling or mailing potential customers. It provides the target audience with more detailed information than is found in media advertising. Direct marketing attempts to get an immediate response from a customer in the form of an order or request for further information. emails letters telephone calls newsletters an effective tool for convincing consumers that the brand can meet their needs.

Consumer Trends

Consumer demand is the measure of consumer willingness to purchase a particular product over a period of time. This demand is determined by social and technology trends.

free enterprise system,

Consumer preferences and demands drive what types of products are offered in the market. The government allows all the workers and entrepreneurs to choose the occupation or business of their own choice. Citizens have property rights, which means they are allowed to own and sell property. Firms have the freedom to set prices and choose their own business partners and alliances.

Right to choose

Consumers have a right to access different product ranges at competitive prices. In the case of products that belong to industries with no scope for competition, government regulation ensures fair prices and quality goods for customers.

Credit unions

Credit unions accept deposits and provide loans. They are owned by the members who use their services, which are typically less expensive than the services provided by commercial banks.

consumers' demand.

Each dollar spent for buying any product is equal to an economic vote in favor of that particular product. Thus, the total votes of all the consumers determine which goods and services will remain in the market.The consumers will then determine which goods to buy based on their prices and other factors. Thus, we can say that consumers constitute the demand curve in the economy.

Financial service companies

Financial service companies offer higher-risk loans to consumers than banks or credit unions. They give immediate access to cash for customers, including people who may have bad credit ratings. However, they charge a higher interest rate compared to loans from banks and credit unions. T

Soil contamination:

Hazardous chemicals get absorbed into the soil through the waste released into the environment. Plants that live in such soil take up harmful contaminants through their roots.

Pollution

Improper waste management can lead to air and land pollution.

Incentives

In order to grab attention and induce immediate sales, some marketers offer incentives to purchase the product.

Implied contract:

In this form of contract, the agreement on the terms of contract is implied through the conduct of the participants in the contract.

Federal Trade Commission

It is the main federal agency that governs consumer protection laws. It considers trade regulations and fair industry practices while judging a trade practice to be fair or deceptive. It governs laws listed below: Fair Credit Reporting Act Fair Credit Billing Act: Fair Debt Collection Practices Act Magnuson-Moss Warranty Act Sherman Act

Truth in Advertising:

The truth-in-advertising laws are a group of laws that protect consumers from misinformation from companies that advertise the products they sell. These laws ban advertising claims that can harm health, make false claims, and defraud consumers

The Circular Flow Model

The two important components of this model are: Households: Households are residential units consisting of people who dwell under the same roof. Firms: A firm is an organization that provides goods and services for earning profits. While households constitute the factor market, firms constitute the product market. A factor helps firms buy services related to factors of production such as labor, capital, raw material, The firms, in return, pay wages for the labor provided. Households use the same wages to purchase goods produced by the firms. In this way, the money received as wages is again injected into the economy.

Offer

There needs to be a clear offer extending a service or any other benefit to the other party (individual or organization).

Depository institutions

These FIs accept and manage customer deposits in checking and savings accounts. They also make loans to individuals and businesses.

Asset management firms:

These FIs are investment companies that invest people's funds in securities. Securities are tradable financial assets that are sold and bought on the stock market. They include bonds, stocks, banknotes, and other assets.

Insurance companies:

These FIs specialize in providing auto, home, and life insurance. Consumers agree to make payments in exchange for the guarantee that if something goes wrong, the insurance company will fix it.

Mortgage loan companies:

These FIs specialize in providing residential or commercial property loans for individuals and businesses. They offer competitive mortgage lending rates and can approve loans more quickly than commercial banks.

Investment institutions:

These FIs specialize in raising money (investment capital) for governments and corporations by issuing securities such as stocks or bonds. People buying a company's securities are buying into a portion of a company and its earnings or income.

Stock brokerage firms:

These FIs trade (buy and sell) financial securities between a buyer and a seller. They make their money off commissions or fees that are paid after the transaction is completed.

Savings and loan associations:

These FIs use money from savings accounts to provide home loans to customers. Depositors deposit their money at the savings and loan association. Borrowers apply for a loan at the savings and loan. The association takes money put in by other depositors to give the borrower a loan.

Natural resources

They include any factor of production that nature creates, such as land, water, air, and so on. They also include renewable natural resources such as solar energy, biomass, or wind, as well as non-renewable natural resources such as coal, crude oil, and so on.

Credit Card Accountability, Responsibility and Disclosure Act

This Act oversees the extent of fees charged by credit card companies for delayed payment. It also sets standards for increasing interest rates on credit cards including the relevant time for the increase.

Unilateral contract:

This form of contract deems acceptance of a contract from the other party when that party performs the requested action. Here, both the partaking parties are clear about this term of contract.

Better Business Bureau

This is a nonprofit organization that provides free business reviews of companies. It assigns different companies with a grade ranging from A (Excellent) to F (Terrible). The grades depend on 16 specific factors that address consumer disputes against a business, government actions against a business, and advertising issues found by BBB.

Mint Global:

This is an online service that provides a database for registered users to research companies worldwide. The database includes company financial data, industry research, and business- and company-related news.

Facts and statistics

This technique of advertising presents relevant facts and statistics to consumers regarding a product to communicate its effectiveness.

Bandwagon advertising:

This technique of advertising puts forth the effectiveness of your product by portraying that your product is popular among customers. Bandwagon advertising shows that multiple consumers use your product. It motivates consumers to trust your product.

Financial institutions

are organizations that act as intermediaries for borrowers and savers. They provide loans, accept deposits, and facilitate financial transactions. involved when consumers shop online or at a physical store, withdraw money from an ATM, or take out a loan for any purpose, FIs are also a part of the daily operations of businesses.

Magnuson-Moss Warranty Act

directs manufacturers and sellers to detail the warranty coverage, terms, and exclusions on products. It provides consumers with access to warranty information. It enables consumers to compare different warranties for similar products.

Office of the Comptroller of the Currency

egulates and supervises national and foreign banks operating branches in the United States. Its mission is to ensure that the banking system is stable, treats customers fairly, and provides fair access to financial services.

The Medical Device Amendments

emphasized the effective functioning and safety of medical devices. It aimed at controlling the injuries and deaths caused by faulty medical devices.

Inflation

he sustained increase in the price of goods and services. Inflation reduces the purchasing power of individuals and families. The government can implement fiscal and monetary policies during recession or inflation. The federal government uses fiscal policy to adjust its spending and tax levels, which affects the money supply in the economy.

Building societies:

hese FIS are owned by their members and operate as mutually beneficial companies, similar to credit unions. They offer banking and other related financial services. This type of FI is not found in the United States but in the United Kingdom and other countries.

dentity Theft and Assumption Deterrence Act

his Act ensures awareness about identity theft and ways to counter the threats of identity theft. It also guides consumers on registering complaints regarding this issue.

The Kefauver-Harris Amendments

his Act made the rules regarding drug safety tougher. It also asked manufacturers to provide evidence of the effectiveness of their drugs.

Fair Debt Collection Practices Act

his Act prohibits debt collectors from making use of unfair means to recover overdue bills. It includes the number of times and time of day a collector may call. It also covers the acceptable methods of collecting a debt.

Federal Hazardous Substances Act

his Act was established to provide warning labels on containers with hazardous substances. Labels must include proper use and storage. Labels should also instruct consumers on what to do if an accident occurs.

Features of services are:

intangible Ownership is not transferred quality time of use involvement with consumers

Supply and demand

make free enterprise systems work. They refer to the behavior of people as they interact with one another in a market.Demand refers to the quantity of goods and services that consumers are willing to buy at a given price. The price of the commodity plays an important role in determining the quantity demanded.

Securities and Exchange Commission

monitors the stock market and enforces laws regulating the sale of stocks and bonds

Food and Drug Administration

regulates the quality and safety of food and drugs. It oversees the effectiveness of drugs, medical devices, and biological products such as tissues for transplantation, blood, and vaccines. It also emphasizes on the safety of animal feed and drugs, and cosmetic and consumer products The Federal Food, Drug, and Cosmetic Act The Medical Device Amendments

Nutrition Labeling and Education Act

requires specific guidelines for common claims such as "high fiber" or "low fat" labels.

External information sources

tend to provide accurate, unbiased information about companies and their products, because they are not affiliated with the companies on whom they report. Thus, they do not talk up the companies' products and services. Governmental agencies (such as the FTC) and not-for-profit organizations (such as the BBB and local chambers of commerce) typically provide more reliable information

Externalities

the effects of one individual's actions on the well-being of somebody else who did not chose to incur that cost or benefit. Externalities can be positive or negative

economic system

the methods used by a society to distribute goods and services.

equilibrium

the quantity demanded is equal to the quantity supplied. Under equilibrium conditions, there is no shortage or surplus of goods.

Monetary policy,

the tool used by the monetary authority (Federal Reserve in United States) to monitor the money supply in the economy. An increase in the bank rate increases the rate at which commercial banks borrow money from the Central bank. This discourages borrowing and reduces the money supply in the economy.

a labor market

the worker is the supplier (or producer) and the employer is the consumer. Wages are the price paid for a worker's labor. The labor demand curve shows the number of workers that firms can hire at different wages.

Human resources

they include the physical and mental efforts of people in the production process. They consist of factory workers, laborers, managers, and so on.

Express contract:

this form of contract is established when both the parties explicitly (orally or written) agree on the contract terms. For example, a worker promises to paint a customer's car in return for the customer's promise of payment of set fees.

Advertising

to communicate with consumers. Advertising is the act of calling public attention to commercial products or services. Advertising professionals use the following media as tools to distribute ads to consumers: billboards radio commercials television commercials magazines ads newspaper articles internet advertising Advertisements create brand recognition by constantly reminding potential customers of a product using images, catchy tunes, or text messages.

Sales Promotions

to convince consumers to buy their products and services. Sales promotions generate consumer interest and increase brand recognition. They are also a way to convince potential customers to try a product or service. Companies hope that by lowering prices or offering free samples,

Personal Selling

to sell their product or service in face-to-face interactions with potential customers. Sellers promote the product through their positive attitude, professional appearance, and detailed product knowledge. answering questions highlighting the product or service's features informing customers how the product or service can meet their needs

different types of economic systems

traditional system, free enterprise, communism, and socialism.

Emotional appeal

tries to persuade the reader by using words that appeal to the reader's emotions instead of to logic or reason

PR and Publicity

use public relations (PR) to provide information to consumers. PR involves using third parties like news journalists or business press to convey positive information about a company or product. PR relies on publicity, or media attention, to get the public's attention for a brand. These are some popular PR techniques: press releases news articles press conferences sponsoring charity events that are reported on in the news

Contractual institutions:

with insurance policies and pension funds. Insurance policies are contracts that protect the policy buyers in a financial emergency (a medical emergency, car accident, death in the family, and so on). Pension funds are investment plans for retirement. They put money in stocks and bonds to make money for members (the people who put money in these funds) in the future.