Transcript Chapter 19.4

Chapter 19.4
The Economy and You
Consumer Rights and
Responsibilities
 Consumers have rights and
responsibilities in our free enterprise
system.
 Consumerism is a movement to educate
buyers about the purchases they make
and to demand better and safer products
from manufacturers.
continued
 Many laws protect consumer rights. The
Fair Packaging and Labeling Act requires
every package to have a label identifying
its contents and how much it weighs. The
Pure Food and Drug Act requires
manufacturers of foods, cosmetics and
drugs to prove their products are safe.
continued
 The Better Business Bureau is one of many
groups formed to protect consumers.
Businesspeople run the local bureaus. They
provide information about local businesses,
warn of dishonest practices and investigate
consumer complaints
 Pres. JFK and later Nixon, emphasized five
rights known as the Consumer Bill of Rights.
Consumers have the right to a safe product, to
be informed, to choose, to be heard and to
redress.
continued
 With consumer rights come
responsibilities. If a product or service is
faulty, you are responsible for starting the
problem-solving process. State the
problem and suggest a fair solution. Keep
an accurate record of your efforts to solve
the problem. If necessary, contact the
manufacturer in writing and keep a copy.
continued
 A warranty is a promise made by a
manufacturer or seller to repair or replace
a product within a certain time if it is faulty.
 Consumers are also responsible for
exhibiting ethical behavior by respecting
the rights of producers and sellers.
Your Role as a Consumer
 Disposable income is money a person
has left after all the taxes on it have been
paid. People generally use it first to buy
necessities, such as food and housing.
Discretionary income is money left over
after paying for necessities that can be
used for satisfying wants, including luxury
items and savings accounts.
continued
 Virtually all the steps in the consumer decisionmaking process involve an opportunity cost.
Consumers must decide if a purchase is worth
the next best option they would have to give up.
 Consider your goals when you make a buying
decision. Buying things now will make long-term
financial goals harder to accomplish.
 Saving is setting aside income for use later. It is
the part of your income that you don’t spend.
continued
 Saving enables people to make major
purchases, such as a car or a house.
Saving also comes in handy in
emergencies.
 Saving by individuals benefits the
economy as a whole. Saving provides
money for others to invest or spend.
Saving also allows businesses to expand.
continued
 To save regularly, workers can have their
employers withhold a fixed amount from their
paychecks and deposit it automatically into their
saving accounts. Or, people may do it
themselves by saving a specific amount each
week or month.
 Interest is the payment people receive when
they lend money, or allow someone else to use
their money. Money saved in a bank earns
interest as long as the funds are in your account.
continued
 Saving is a trade-off. You decide to spend
less today to increase your ability to spend
in the future.
 To decide how much to save, you need a
plan. Your plan would consider your
everyday expenses, reasons for saving,
interest you could earn and your potential
to earn a higher income in the future.