ECONOMICS

CHECKPOINT 1 On average, who suffers from the highest unemployment rates?

people with a high school diploma

CHECKPOINT 1 On average, who earns the highest salaries?

people with a professional degree

CHECKPOINT 1 Where would you find the most useful information about post-secondary education and training?

-Department of Education -military and school websites

ADVERTISING AND CONSUMER CHOICE Which accurately describes a push marketing tactic to help manufacturers sell more products?

A manufacturer offers department stores incentives for selling its product

ADVERTISING AND CONSUMER CHOICE Pull Strategy

A social media campaign, in which a company tries to get attention on various social sites to draw product interest, is a type of pull strategy. This is a strategy that encourages a consumer to seek out a product, even though the consumer had not recently expressed interest.

BUDGET CAUSE AND EFFECT Cause: By not making changes to your budget as your income increases . . .

Effect: ... you will not be sure how much money you may want to save.

BUDGET CAUSE AND EFFECT Cause: By not keeping your budget up-to-date monthly . . .

Effect: ... you will run low on available money to spend.

BUDGET CAUSE AND EFFECT Cause: By not setting financial goals . . .

Effect: ... your income and ability to save and invest in your future may be negatively affected.

EMPLOYMENT George is 22 years old, single, and has just started his first job. He saves 5 percent of his monthly income for retirement. Kirsten is 30 years old and married with two children. She will start saving 6 percent of her income for retirement when she turns 35. Which person will have more money at age 65 if all other factors are the same?

George will because he is younger and saving for a longer period.

CHECKPOINT 1 Which is the best example of direct vendor advertising?

a commercial during the Super Bowl for Starbucks coffee

BUDGET CAUSE AND EFFECT What is a budget?

a plan for spending your money to meet your wants and needs

FORMS OF ADVERTISING Which best explains product advertising features?

advertising that focuses exclusively on the benefits of the product

INTRO TO ECONOMICS What is the meaning of the word economics?

laws for the home.

HOW TO CREATE A BUDGET Which best defines disposable income?

income available after taxes and other mandatory expenses

LESSON 1

PERSONAL FINANCE AND ADVERTISING

CHECKPOINT 1 Which items make up the marketing mix?

place, price, promotion, product

BALANCING A CHECKBOOK Heathcliff is balancing his checkbook. He starts his ledger with the $145 he has in his account. He records $27 spent at the grocery store followed by $58 spent on his cellphone bill. Then, he receives $540 from work. He then spends $54 at a restaurant and $38 at the movies. He deposits a check from his parents for his birthday worth $180. Then, his landlord cashes his check for rent for $600. How much did Heathcliff earn from work and for his birthday?

$720

BALANCING A CHECKBOOK Heathcliff is balancing his checkbook. He starts his ledger with the $145 he has in his account. He records $27 spent at the grocery store followed by $58 spent on his cellphone bill. Then, he receives $540 from work. He then spends $54 at a restaurant and $38 at the movies. He deposits a check from his parents for his birthday worth $180. Then, his landlord cashes his check for rent for $600. How much did Heathcliff spend at the grocery store and for his cell phone?

$85

FORMS OF ADVERTISING Comparative advertising includes which of the following criteria?

-better price -increased quantity -additional features

INTRO TO ECONOMICS How do you benefit from understanding personal finance?

-comprehending the difference between debit and credit cards -making quality choices about money by creating and managing a budget

CHECKPOINT 1 Which are part of the marketing mix?

-have the proper packaging -know what people will pay -have multiple locations

CHECKPOINT 1 Why is cooperative advertising the most common form of advertising used by wholesalers and manufacturers who jointly advertise a product?

-it allows for sales at a discounted price -Large quantities can be held in stock

WHAT IS A BUDGET How do individuals benefit from creating a budget?

-it helps them devise a plan to save money -it helps them identify their expenses -it helps them identify their income

EMPLOYMENT Which are offered by joining the military after high school?

-receive tuition assistance after serving a certain number of years -receive training while earning a salary

FORMS OF ADVERTISING Most businesses engage in multiple kinds of promotion. Nearly all of them create advertising of some kind to promote the products they make or the services they provide. Producers use product advertising for several reasons:

-to introduce new goods or services -to draw consumers into their stores or sites -to encourage sales or promote special events

EMPLOYMENT As students approach the final years of high school, they usually begin to consider different options for their future. While personal interests are important to consider, they are not the only things to keep in mind. Other matters a person must consider include these:

-where to live -hoped-for lifestyle -anticipated earnings -expenditures for training or education

FORMS OF ADVERTISING Forms of Product Advertisements

1.) Comparative Advertising This form of product advertising involves a business comparing its product to those of its competitors. An ad could include offers such as better price, increased quantity for your money, or additional features or benefits. 2.) Direct Mail This form of advertising was one of the earliest methods of sending product information to consumers. Often termed promotional mail, direct mailing includes catalogs, flyers, and product or service brochures. 3.) Cooperative Advertising This common form of advertising is used by wholesalers and manufacturers who jointly advertise a product. For example, if a manufacturer wants to promote a new coffeemaker, it might team up with a wholesaler or retailer of household goods to advertise the product. Because the product is advertised directly from the manufacturer, the wholesaler is then able to sell it at a discounted price, and keep track of supplies so it can have large quantities in stock. 4.)Promotional Advertising This form of advertising involves creating an ad campaign featuring a special activity of some kind as part of the promotion. For example, sale promotions might offer discounted prices on featured products for a limited time, or advertise a free gift with a minimum purchase. This type of advertising also applies to product displays that draw customers to buy products or services.

ADVERTISING AND CONSUMER CHOICE The Four P's

1.)Product: This identifies the good or service being sold and what is unique or special about it. -What makes our product different from similar products? -What will our product packaging look like? 2.)Price: This identifies the cost of the good or service. The company sets a price for the good or service by considering many factors beyond the profit it wants to make. -How much are people willing to pay? -Should this product be a "high end" product that costs more, or a "value" option that saves people money? 3.)Promotion: The company uses a combination of tools and techniques to spread information about the product. -Should we focus our energy in online advertising or use television ads? -Should we create a social media campaign? 4.)Place: This identifies where and how the product is sold. -Should we have retail stores, or sell our product entirely online? -Should we have other retailers sell our product?

WHAT IS A BUDGET budget

A budget is a plan for spending and saving money. Maintaining an accurate budget allows you to track whether you will have enough money to pay your bills, live comfortably, and do the things you would like to do in life. Having an accurate budget can also keep you out of debt or help you work your way out of debt.

BUDGET CAUSE AND EFFECT budget

A budget is a plan for spending your money to meet your wants and needs. A budget enables you to learn how to live within your means. Budgeting is an ongoing process that should be monitored monthly.

FORMS OF ADVERTISING Advertising Price and Product Availability

Ads based on price and availability make up a major portion of the ads consumers see. They are intended to inform customers that the product is available and to encourage them to buy in various ways. Typical ads of this sort feature products from many manufacturers that list the prices and benefits of each; think of the weekly ads that arrive with a Sunday newspaper, for example. With these kinds of ads, companies have to consider the following: -Retailers must ensure product availability to consumers if they are going to advertise in this way. -Advertising provides price information and any applicable discounts or sales promotions. -Advertisements come from the retailer, either local or as part of a national campaign. Examples of Advertising Price and Product Availability -weekly grocery ads in newspapers or magazines -retailer-created flyers distributed by mail -signs inside or outside of the store -television or radio ads from car dealers -direct mail ads from a gym offering a reduced price for membership -social media ads pointing out sales on products you have searched for online -special in-store displays for sale items -product demonstrations or free product samples in grocery stores / warehouse club stores

HOW TO CREATE A BUDGET income and expenses

An important step in developing financial security is evaluating how much money you take in, or your income, and how much money you spend, or your expenses

FORMS OF ADVERTISING Vendor Advertising

Another type of retail advertising is referred to as vendor advertising. This is advertising that comes directly from a particular vendor, intended to get consumers to exclusively buy a specific brand, without including a named price or specific deal on the product. Examples of Vendor Advertising -television ad for Apple iPads -television and print ads for Nike athletic apparel -Estee Lauder Cosmetics Company ads that run in fashion magazines -Coca-Cola ads that air during televised sporting events

ADVERTISING AND CONSUMER CHOICE Push Strategy

Another type of strategy is a push strategy, which places the actual product in front of the consumer. One way you see this in the real world is when companies offer incentives to a retailer like Walmart or Target to sell their product. They work with such retailers to place the product where consumers can see it best.

LESSON 2

BUDGET AND GOAL SETTING

BALANCING A CHECKBOOK Calculations

Calculation 1.) So add 145+(−27). Answer: 118 Calculation 2.) Add again: 118+(−58). Answer: 60 Calculation 3.) Then, he receives $540 from work. Since he is receiving money, is the $540 positive or negative? Answer: Positive Calculation 4.) Now add 60+540. Answer: 600 Calculation 5.) He then spends $54 at a restaurant and $38 at the movies. Since he is spending money, are the $54 and $38 positive or negative? Answer: Negative Calculation 6.) Then, add again. What is 600+(−54)? Answer: 546 Calculation 7.) Now add 546+(−38). Answer: 508 Calculation 8.) Heathcliff deposits a check from his parents for his birthday worth $180. Since he is receiving money, $180 should be positive. Now, add 508+180 Answer: 688 Calculation 9.) Then, his landlord cashes his check for rent for $600. Since Heathcliff had written a check, this is money that he has spent. Is the $600 positive or negative? Answer: negative Calculation 10.) Finally, add 688+(−600) Answer: 88

BUDGET CAUSE AND EFFECT Cause: By not setting some money aside . . .

Effect: ... you may not be able to cover an unexpected cost, such as an accident or medical issue.

BUDGET CAUSE AND EFFECT Cause: By not reviewing your budget at least once a month . . .

Effect: ... you will have no record to keep track of where your money is going.

BUDGET CAUSE AND EFFECT Cause: By not paying attention to your flexible expenses . . .

Effect: ... it will be easy to lose track of how much items cost.

PROJECT 1 Which is an example of a SMART financial goal?

I want to save $25 per week by packing my own lunch in order to pay off my $100 in credit card debt in the next 30 days.

ADVERTISING AND CONSUMER CHOICE Marketing Strategies

In order to spend that money wisely, these companies try to determine a target market, or a particular group of consumers who they believe are most likely to be interested in their product. Companies do this so they can focus their advertising efforts in the right place.

FORMS OF ADVERTISING Retail Advertising

In-store retailers advertise to get customers in the door. Retailers have a limited window of opportunity to get a customer's attention, so it is imperative that advertising strategies work on a number of levels. Many stores run their own ads at the local level, but oftentimes retailers are also dependent on other levels of ad and marketing support. For example, national department stores like Macy's use nationwide ad campaigns, usually involving ads (both print and electronic) that appear in media across the United States. Each local branch of Macy's and other national stores depends on these corporate promotions to bring in business. The focus of the ads themselves varies, but the following basic strategies apply to most ads used in retailing.

FORMS OF ADVERTISING Television

It may be hard for younger generations to picture this, but the first television commercials were made in black and white. It wasn't until June 1951 that CBS aired the first color television commercial. Today, as technology has evolved, so has the sophistication of television commercials. Key Elements of Television Advertisements: -Companies have to cover the cost of producing the television commercial, including all elements of filming, hiring talent, etc. -Companies also have to pay for airtime, typically sold by length of the ad (15 seconds, 30 seconds, etc.). Rates vary depending on the time of day the television commercial airs; early evening, which is considered prime time, is more expensive than late-night time slots. -To be effective, a television commercial needs to provide a clear message or demonstration about the product and/or service the commercial is about. -Television commercials are shown on major networks, cable channels, local television stations, and public access channels. Again, costs with these outlets vary widely, with local channels typically charging less than major networks. Benefits of Television Advertisements: -Television commercials can increase sales by reaching a wide consumer base. -Television commercials can be focused on a particular target market. For example, commercials that run during the daytime typically promote products and services geared toward those who are home during the day, such as homemakers or those who are retired. Commercials that run during sporting events tend to be focused toward sports fans. Children's programming typically show commercials for toys. -Television commercials appeal to a multitude of senses and human emotions. Drawbacks of Television Advertisements: -Television ads, especially on national networks, can be extremely costly. -The repetitive nature of commercials can eventually annoy consumers rather than attracting them. Viewers might mute the audio or just ignore the ads. -The wide exposure can make it difficult for a major brand to make changes to its product. Consumers tend to like consistency, so there is a risk in attempting to change a product's message.

FORMS OF ADVERTISING Radio

Radio is the oldest form of broadcast media, but advertisements through this form are still a widespread and valuable strategy to this day. Key Elements of Radio Advertisements -Businesses can focus on specific target markets and customers. -Ads are aired across multiple types of radio stations, such as music stations and news stations. -Ads rely on audio to deliver the message of the product or service. Benefits of Radio Advertisements -Radio ads are less costly to produce than television ads. -Businesses can easily customize a message to a target audience, based on the radio station format. For example, people who listen to one particular type of station (such as rock, country, etc.) will typically hear ads that more closely match their demographic. -Radio ads can be inventive and clever, finding ways to create mental images that help people remember the products and increase effectiveness of the ads. -Advertisers have more flexibility in choosing the best air times at affordable rates. Drawbacks of Radio Advertisements -People who are listening, especially in their cars, can easily tune out advertisements simply by switching the station. -Ads are dependent on audio senses only, forcing consumers to imagine the visual element. -Radio ads are often very repetitive, and take up a lot of air time on many stations.

CHECKPOINT 1 Read the scenario. Anna is 21 years old and single. She was recently hired by a marketing firm, and her new employer offers a 401(k) program. When should Anna enroll in the 401(k) program?

She should enroll as soon as possible to invest and grow her retirement savings

ADVERTISING AND CONSUMER CHOICE Marketing Mix

Some advertisers start with a concept known as the marketing mix, or four P's. These four pieces of information define a particular product and also help identify what makes it different or special compared to similar products.

PROJECT 1 When setting financial goals, it is important to set SMART goals. What does the acronym SMART stand for?

Specific, Measurable, Attainable, Relevant, Timely

BALANCING A CHECKBOOK Example: Heathcliff is balancing his checkbook. He starts his ledger with the $145 he has in his account. He records $27 spent at the grocery store followed by $58 spent on his cellphone bill. Then, he receives $540 from work. He then spends $54 at a restaurant and $38 at the movies. He deposits a check from his parents for his birthday worth $180. Then, his landlord cashes his check for rent for $600. What is Heathcliff's balance after he enters all of these items? Is his balance always positive?

Step 1.) Identify the problem. What should you look for to answer this problem? -the balance after every transaction and the final balance Step 2.) Make a Plan If all money Heathcliff earns or receives is written as a positive number, and all money that he spends is entered as a negative number, then add the numbers together to find his balance after each transaction. Balance + (Money earned or spent) = New Balance Step 3.) Solve Take this problem apart one sentence at a time. He starts his ledger with the $145 he has in his account. So, his starting balance is $145, a positive number. He records $27 spent at the grocery store followed by $58 spent on his cellphone bill. These are the amounts spent, so are they positive or negative? -negative Step 4.) Look Back In this case, looking back at the problem, you should check the rationality of your answers. You should then finalize your answers to be sure you've addressed the questions that were asked. Rationality: When each item was added, did it make sense that the amount in Heathcliff's account either increased or decreased? (This is a question you can answer mentally for yourself as you review each step.) If you look back through the results of all of his transactions, what can be determined about his balance? -It was always positive

HOW TO CREATE A BUDGET Expenses

The next concern when preparing a budget is an individual's expenses. Expenses are usually listed below income and are divided into two categories. The first category is called FIXED EXPENSES. These are the individual's costs that do not change based on use or volume. They also stay the same from one period to the next. Usually, one of the largest fixed expenses for people is related to housing and is listed as rent or a home mortgage. Other fixed expenses include medical or automobile insurance premiums and loan payments for things like cars and school. The other types of expenses in a budget are listed as VARIABLE EXPENSES. These expenses change based on use or volume and are different from one time period to the next, and include things like groceries, transportation costs, clothing, travel costs, and entertainment. Emergency expenses would also show up under variable expenses.

EXAMPLE BUDGET According to the Monthly Budget worksheet, how does a person determine how much money he or she has available to put in savings?

The person subtracts total expenses from total income.

FORMS OF ADVERTISING Advertising Product Features

This strategy can be carried out by a local store, but oftentimes it is part of the company's overall campaign. These ads tend to focus solely on a single featured product. -Advertisements and promotions generally come directly from a manufacturer or producer of the product. -Advertising focuses exclusively on the product features or benefits. Examples of Advertising Product Features: -sleeping bag that can be used in temperatures as low as -40 degrees -wrinkle-free and stain-resistant clothing -programmable remote control vacuum -athletic shoes that claim to make you run faster -mattresses designed to help you sleep better -nonstick cookware

HOW TO CREATE A BUDGET Income

When preparing a budget, the first factor to consider is income. For many people, income is the money they make in salary. It can also come from other sources such as investment income, a second job, alimony payments, or other areas. Regardless of the source, in a simple budget, all money coming in is listed as income, and it is added together to provide a total income. This is usually listed at the top of a document or spreadsheet, similar to this table. Paul is creating a budget for a full month, and he has two sources of income for a total income of $2,250.00. Generally, people who prepare a budget like this only include their disposable income, or the income that is available after taxes and other mandatory expenses have been paid.

FORMS OF ADVERTISING Broadcast and Online Media

When retailers or marketers talk about "broadcast media," they often mean television and radio. Until the advent of the Internet, these were the primary non-print ways of advertising to a wide audience. The Internet similarly reaches a broad spectrum of people, and is now often grouped with broadcast media because of its similar scope. These mediums can be effective channels for advertising. They can generate appealing, animated images and connect directly with the audience in a more emotional way than most print ads.

FORMS OF ADVERTISING Online

With advances in online technology, more businesses are turning to a newer form of advertising: online advertising. Benefits of Online Advertising: -Online advertising reaches a wide consumer base. -Businesses have many options in the way ads appear online. --Options include pay-per-click advertising, pop-up style ads, or the establishment of a business's own website. -Online advertising can be more cost-effective than radio or television, because it can be more narrowly focused. -Online ads are easier to customize and can be personalized for customers in very specific ways, based on information such as search history and click history. Drawbacks of Online Advertising: -Internet users often find that online ads can be annoying. They are always just one click away from leaving the ad behind. -Internet users can use software or browser settings to limit their exposure to online ads. -Online ads are easy to copy. For example, by merely cutting and pasting, someone can copy a logo or an image. -The Internet can become easily cluttered with ads. Ad overload keeps users from focusing on any one ad, and often sends potential customers elsewhere.

CHECKPOINT 1 When should you start planning for retirement?

You should start planning as soon as you decide on a career path

BUDGET CAUSE AND EFFECT

You will have no record to keep track of where your money is going.

ADVERTISING AND CONSUMER CHOICE Advertising

communication designed to gain people's attention to deliver a message about products or services, specifically to entice people to purchase.

ADVERTISING AND CONSUMER CHOICE What are the four Ps of marketing (also known as the marketing mix)?

product, price, promotion, and place

HOW TO CREATE A BUDGET Sally needs to pay her bills this month. Her bills include rent, utilities, groceries, concert tickets, airfare, car insurance, a car rental, and a trip to an urgent care facility. What are Sally's fixed expenses?

rent and car insurance

EXAMPLE BUDGET Which are considered fixed expenses?

rent, cable TV, and car insurance.

CHECKPOINT 1 Which is the best reason for why companies use product advertising features?

to focus on a specific benefit