Unit 4: Developing Consumer Skills
Federal Trade Commission (FTC)
alerts consumers about fraud and unfair business practices
Step two of the PACED decision model
alternatives- list alternatives that are being considered
Breach
an act of breaking the terms set out in a contract
Cellphone contracts are generally (blank) contracts.
standard
3 Steps to Making a Contract
1.) A customer makes and offer. 2.) A seller accepts the offer. 3.) The buyer and seller exchange something of value (consideration)
Consumer Remedies Steps
1.) return to the place of purchase- be polite but firm 2.) contact the business 3.) get help from a government or private consumer protection agency 4.) take a legal action, if necessary
A three-day cooling off period applies to which of the following? A.) Items purchased from temporary business locations, such as mall kiosks B.) All of these C.) Sales hosted in locations such as a hotel, restaurant, or convention center D.) Home-sale parties E.) Purchases made from a door-to-door salesman
B.) All of these
A product's packaging is part of which of the 4 P's of marketing? A.) Preferences B.) Product C.) Place D.) Promotion E.) Price
B.) Product
Potential costs of going paperless include which of the following? A.) Missing payments B.) Delay in monitoring accounts C.) All of these D.) Remembering passwords E.) Limited access to older statements
C.) All of these
Which of the following is an example of conspicuous consumption? A.) Expensive jewelry B.) Rolls Royce automobiles C.) All of these D.) Silver spoons E.) Rolex watches
C.) All of these
A PACED decision-making grid used to decide where to go to college might include which of the following alternatives? A.) Job placement success B.) Forgone earnings C.) The local community college D.) Distance from home E.) Rate of return on investment
C.) The local community college
Which of the following is a consumer right? A.) All of these B.) To safeguard against fraud C.) To be informed D.) To maintain vigilance E.) To pay low prices
C.) To be informed
Determining whether each criterion is favorable or unfavorable is done during the [1] phase of the PACED decision-making process. A.) alternative B.) decision C.) evaluation
C.) evaluation
A consumer should continue to comparison shop as long as the marginal benefit from the additional time spent is A.) greater than zero B.) greater than the price of the product C.) greater than the marginal cost D.) less than the price of the product
C.) greater than the marginal cost
Which of the following government agencies provides consumer information about goods and services? A.) CPSC B.) CFPB C.) FTC D.) All of these E.) FDA
D.) All of these
Which of the following should be covered in a roommate agreement? A.) how living space will be shared B.) who pays for what and when C.) rules regarding pets, smoking, drinking, and guests D.) All of these E.) who takes care of chores
D.) All of these
Which of the following is a step to take to avoid credit card fraud? A.) Notify the card issuer immediately if you lose your card. B.) Sign your card as soon as you receive it. C.) Store your card in a secure place. D.) Be sure to secure your receipt after you buy something on credit. E.) All of these
E.) All of these
Advertising is never meant to inform consumers. True or False
False
Any item you must pay for with a credit card is conspicuous consumption. True or False
False
Consumer protection laws make it easy to recover from identity theft. True or False
False
Determining the procedures used to make a decision is the first step in the PACED decision-making model. True or False
False
A buyer's remorse law gives consumers the right to return goods for any reason or no reason during a given number of days after purchase. True or False
True
A well-planned filing system makes it easy to shred documents you no longer need. True or False
True
Food is a commonly recalled product. True or False
True
Magazines like Consumer Reports and Money provide consumers with useful information on a variety of products and services. True or False
True
Sales incentives include rebates, loyalty programs, promotional items, and bonus products. True or False
True
The state law that addresses tenant-landlord issues is the Virginia Residential Landlord and Tenant Act (VRLTA). True or False
True
You will need access to important documents when you file your taxes, or apply for a loan, credit card, job, or apartment lease. True or False
True
Sales Incentives
are enticements to get customers to purchase products or services. They include rebates, loyalty programs, promotional items, or bonus products.
Financial Institutions
banks, credit unions, savings and loans
A (blank) buys and sells assets for someone else.
broker
Brokers
buy and sell your investments for you, using their financial knowledge of the market
Comparison shopping does NOT involve considerations of
celebrity endorsements
Dollar Costs
comparison shopping required calculating the total dollar cost of alternative products or services. The total cost includes all payments, taxes, and other fees required for the purchase.
Buying goods and services not for their intrinsic value but for the purpose of impressing others is called
conspicuous consumption
Cause Marketing
cooperation between a for-profit business and a non-profit organization to promote social and charitable causes
Skimming
criminals use a special device that records credit or depit card information
Step three of the PACED decision model
criteria- establish the different criteria that you will use to make the decision
Step five of the PACED decision model
decide- make the decision based on the evaluation of the criteria
Step four of the PACED decision model
evaluate- evaluate each alternative considered according to the criteria established
Phishing
fraudulent emails purported to be from banks, companies, or government agencies solicit personal information
Hacking
hackers are dishonest people with computed skills who use software to break into email or online accounts to obtain person information
Breaking into email or online accounts to obtain personal information is called
hacking
Null and Void
having no legal force
Product Guarantees
include promises to give the customer their money back, and free product repair or replacement. The value of a product guarantee depends on its cost compared to its benefits.
Inbound Marketing
information the consumer is seeking from the business
"Oaty cereal helps you lower your cholesterol" is an example of (blank) advertising.
informative
Investor Services
involves
Identity theft
is the acquisition of someone's private identifying information by fraud
Marginal Benefit (MB)
is the additional benefit of an additional unit. As you continue to do or buy something, the marginal benefit of continuing decreases. You get less additional satisfaction as you consume more and more units of a good. That is, the first units are better than the last.
Marginal Cost (MC)
is the additional cost of an additional unit. As you continue to do or buy something, the marginal cost of continuing increases. You give up more as you consume more units of a good. That is, the first units cost less that the last (think opportunity cost).
Household Inventorty
list of valuable property
Conspicuous Consumption
making purchases with the intent of impressing others- when people prefer a good because it is more expensive
Point-of-Purchase (POP) Marketing
marketing that happens where products and consumers are located, for example product displays an on-product coupons
Better Business Bureau (BBB)
mission is to be the leader in advancing marketplace trust
Step one of the PACED decision model
problem- determine the problem to be solved by the decision
Consumer Product Safety Commission (CPSC)
provides information on product safety
Food and Drug Administration (FDA)
provides information on the safety and effectiveness of food and drug products
Earned Media/Public Relations
publicity not from advertising, like newspaper articles
Investment Firms
publish newsletters grading different stocks, bonds, and funds
The first step in the four-step process to address consumer complaints is to
return to the place of purchase
Direct Selling
sales people build face-to-face relationships with customers
A sum of money kept by the landlord during the term of a lease is called a
security deposit
Opportunity Costs
the value of what is given up when purchasing alternative goods and services must be considered when comparison shopping. For example, the service required to maintain one seller's product may require a trip to another city each year while another seller's product can be maintained nearby.
Sublet
transferring a lease to another tenant
Co-branding and Affinity Marketing
two brands join together to promote a single product or service
Force Majeure
unforeseeable circumstances that prevent someone from fulfilling a contract
Outbound Marketing
what the businesses send to you as a marketing tool for their products and services
Assignment
when one party to an existing contract hands off the contract's obligations and benefits to another party
Financial Advisors
who provide financial services/ guidance to clients