Daily Information – 10/17

Objectives:

1. Describe methods of setting prices in a market economy

2. Explain consumer buying strategies.

Warm Up:

You have 5 minutes to complete the activity from yesterday

“Fighting Inflation”

Agenda:

1.Complete the warm up2.Define vocab.3.Making purchases P.P.4.Fill in the blank activity

Fighting Inflation

How do actions of the Fed affect your life and that of your family?

• When the Fed raises interest rates, consumers find it harder to borrow and repay loans.

• When rates are low, loans are easier to obtain and repay.

• This directly affects a family’s ability to make and repay large purchases on credit

Fighting Inflation

How does raising tax rates help curb inflation?

• Generally, tax increases decrease disposable income and purchasing power.

• As we spend less, the inflation rate decreases.

Cost-recovery

• (R&D costs)

Cost-plus

• (production costs plus a markup)

Value-based

• (what consumers are willing to pay)

Market-based

• (competitive with similar products)

Rational buyingo Economizing is saving money and spending only

when necessary.o Optimizing is getting the highest value for money

spent.

Emotional buying –desire rather than logic (sad, angry)

Impulse buying –spur of the moment without any planning

Convenience

Customer service

Appeal to the needs and wants of customers• Brands and loyalty• Discount pricing (lowest price possible)

Advertise to target audience

What are some of the ways a business can advertise?

T.V.RadioBillboardsLoyalty Programs

MagazineInternetHome MailingsTransit

Before You Shop

• Research and plan (create lists)

While You Shop

• Avoid impulse and emotional buying

After You Buy

• Keep receipts and warranties

The Consumer Bill of Rights of 1962

Having the right to…..

• Safety• Be informed• Choose• Be heard• Redress (compensation for complaints

and injuries)• Consumer education

Food, Drug, and Cosmetic Act of 1938

• Safe, pure, and wholesome

Hazardous Substances Act of 1960

• Warning labels

HIPAA of 1996

• Limit access to health and medical billing

Federal agencieso Examples: USDA, FDA, CPSC, FTC, SEC

State and local assistance

Public Officials

Private Organizations

Bait and Switch

Fake Sales

Low-Balling

Pyramid Schemes

Ponzi Schemes

Infomercials

• Identify deceptive practices

• Shop smart

• Stay informed

• Seek redress (remedy the problem)

Group Activity

• Fill in the blank activity