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Chapter 3
Your Role as a Consumer
Section 3-1: Consumption, Income
and Decision Making
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Disposable and Discretionary Income
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The ability to consume depends on a person’s available income
and how much of it is spent or saved.
Disposable income is money left after paying all taxes, whereas
discretionary income is money left after paying for necessities or
money that can be saved or spent on luxury items.
Education, occupation, experience, health, location, and wages
can all influence a person’s ability to consume.
Spending income requires constant decision making.

Decision making as a Consumer
 Whether or not to buy an item
 Time costs- invest time in obtaining
information about
the item
 Opportunity costs- choosing between a low-, mediumor high-quality item
 Rational choice is making a decision based on
opportunity costs
 Choose the best quality item that is the least
expensive and will satisfy your wants
 Rational consumers will all make different choices.
Section 3-2: Buying Principles or
Strategies

Gathering Information
 Takes
time and research
 Try to find out only what you need to know
 Getting accurate information from a
salesperson is a life-long skill
 Use the Internet to research a product and the
companies selling it

Using Advertising wisely
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Advertising is everywhere
Competitive advertisements try to convince people one product
is better than another product and try to create brand-name
recognition or loyalty
Informative advertisements provide information about the
product, such as price or features
Some advertisements use deceptive tactics, such as bait and
switch, to present their products
They “bait” by advertising the item at a low price, but say it is out
of stock when the consumer gets to the store
They “switch” by trying to sell a higher priced item instead,
promoting its good features over the out-of stock item

Comparison Shopping
 Compare
different stores and companies
 Use information obtained from other stores to
negotiate lower prices
 Consider the different product warranties
 Compare the value of generic to brand name
products
Section 3-3: Consumerism

Consumer Rights
 Businesses
are now responsible for product safety,
healthful food, and accurate advertising
 Since 1962, consumers have the right to product
safety, to be informed about their product, to choose
from a variety of products, and to be considered in
making laws about products
 Consumers also gained the right to redress or obtain
payment for damages caused by products

Help for consumers
 People
can complain to store managers and
manufacturers when dissatisfied with a product
 Better Business Bureaus give information on products
and help to settle buyer and seller disagreements
 These are magazines and private consumer groups
that provide helpful information on products
 Federal agencies require consumer notification and
warranties

Consumer Responsibilities
 Be
informed about purchases
 Consumers need to initiate the problemsolving process when a product or service is
faulty
 Practice honest and ethical behavior
 Only return products with legitimate faults