Electric Bill Anniversary Present Make – up Gas for your car Tickets to Football Game

1. Bell Ringer #1 - Chapter 3Create a list of disposable/need expenses and another for discretionary/want expenses using the items listed below. • Electric Bill • Anniversary Present • Make – up • Gas for your car • Tickets to Football Game • New Jeans • Lunch at Runza • Rent Payment • Groceries • Lunch Money for Child

2. Answers Disposable Discretionary • Electric Bill • Gas for your car • Rent Payment • Lunch Money for Child • Groceries • New Jeans • Lunch at Runza • Anniversary Present • Make – up • Tickets to Football Game

3. Chapter 3 Your Role as a Consumer

4. Section 1 Consumption, Income, and Decision Making Video

5. Vocab: • Consumer: any person or group that buys or uses goods and services to satisfy personal needs and wants. • The ability to consume depends on available income and how much of it a person chooses to spend now or save.

6. INCOME DISPOSABLE DISCRETIONARY • Income remaining for a person to spend or save after all taxes have been paid. • Spend on: • Food • Clothing • Shelter • Bills associated with shelter • ie. necessities • Money income a person has left to spend on extras after necessities have been bought. • Examples: • Luxury items • Entertainment • “Non-necessities” • Or – put into savings

7. Consumer decision making deals with consumers’ choices about how to spend their income. VS 1

8. What are four things that can make a difference in a person’s earning power? • Education • Occupation • Experience • Health

9. Decision Making as a Consumer Involve three main considerations: • Scarce resources • Income & time • Research the product – the time and money you spend on the product ultimately cannot be used for anything else.

10. 2. Opportunity Cost – see page 68 (figure 3.2) • If you pick a high quality product over a medium or low-quality, you will pay more money. • What features are important to you? • Is it a need or want? • Is it worth paying the extra money? Chart in Motion

11. 3. Rational Choice —choosing the alternative that has the greatest perceived value from among comparable-quality products. • Each person’s value system is different.

12. Monday 2/9 • Bell Ringer #3: • Break down YOUR budget • Income = • What expenses do you have & how much? • Today: • Consumer Spending – staple to your notes • Budgeting Activity • Homework: Article & questions

13. Figure 2

14. Activity—Rational Choice • Choose a product you like and create two advertisements. The first ad should emphasize why buying this product is a rational choice. The second ad should appeal to the fun or light side of the product and the desire to buy it, even if it’s not a rational purchase. Example-Coke (thirst—rational & drink b/c everyone else does–more fun)

15. Section 2 – Buying Principles & Strategies

16. Three Basic Buying Principles • Gathering information • Using advertising wisely • Comparison shopping

17. Gathering Information • Shopping tips: • You should obtain only as much information as is worthwhile. • Ask salespeople for accurate information. • Use a standard search engine on the Internet, and visit various sites in order to compare different information. • Read reviews other people have written about different brands and models of the product

18. Before making purchases, especially of big-ticket items, consumers should gather information and compare products from different sources.

19. Using Advertising Wisely • competitive advertising: advertising that attempts to persuade consumers that a product is different from and superior to any other

20. informative advertising: • advertising that benefits consumers by providing useful information about a product • Look at page 72-73

21. Be Aware of Deceptive Advertising • Bait and Switch-- ad that attracts consumers with a low-priced product, then tries to sell them a higher-priced product

22. FYI Studies reveal that Americans are bombarded with 3,000 to 5,000 advertising messages a day. The assault is so overwhelming that people scarcely notice most of these messages.

23. Comparison Shopping • getting information on the types and prices of products available from different stores and companies • Warranty-the promise of a manufacturer to repair or replace a product within a certain period of time if it is faulty

24. Comparison shopping continued… Brand name Generic • Word, picture, or logo on a product that helps consumers distinguish it from similar products. • General name for a product rather than a specific brand name given by the manufacturer.

25. Decision Making Process – 5 Steps • Identify the Problem • List the Alternatives • Determine the Pros and Cons • Make the best Decision • Evaluate the Decision

26. With A Neighbor • Share with a neighbor the big decision you wrote about in your notes. • Tell them what your alternatives were • Tell them which decision you made • Tell them how it turned out – would you make the same decision again? What would you do differently?

27. Decision Making Con’t • People often make a chart or list to help them make decisions. • Let’s practice using the chart on the back of your note sheet using the 5 steps. • Identify the problem – Need to choose a college • List the alternatives – UNL, UNK, SCC, Kansas State, Harvard

28. Decision Making practice con’t • Determine Pros and Cons • List criteria –Tuition cost is $85 per credit hour or less, Must have 2000 students or less, Must have dorms and cafeteria plans, Must be within a 2 hour drive of Lincoln, Have a marching band program, Have an abroad program for the Junior and Senior year • Check Alternatives and Criteria for pros and cons

29. UNL • $85 per credit hour • Has 8,000 students • Has dorm/cafeterias for students • Less than a 2 hour drive • Has a top marching band program • No abroad studies programs

30. UNK • $85 per credit hour • Has 1700 students • Less than a 2 hour drive from Lincoln • Has dorm/cafeteria programs • Has a marching band program • Has an abroad studies program

31. SCC • $60 per credit hour • Has 1000 students • Less than a 2 hour drive from Lincoln • No dorm program has a cafeteria • No marching band program • No study abroad program

32. Kansas State College • $125 per credit hour (out of state rate) • Has dorm/cafeteria plans • More than a 2 hour drive • Has 2,000 students • Has marching program • Has an abroad study program

33. Harvard • $275 per credit hour • Has 3,500 students • Much more than a 2 hour drive • Has a dorm/food program • Has a marching band • Has a study abroad program

34. Decision Making Practice con’t • Make the best Decision. • ? • Evaluate the Decision • Best college experience ever!