The document discusses the role of consumers in the economic system and how they make decisions throughout the buying process, including factors like income, spending habits, research and comparison shopping. It also covers consumer rights and responsibilities, and organizations that provide resources and protection for consumers. The overall theme is helping readers understand smart consumer behavior and their role in the marketplace.

1. Bell Ringer
Think of a recent purchase you
made.
What were the decisions you made
throughout the buying process?

2. CHAPTER 3
Your Role as a Consumer

3. Learning Goals

4. Section 1
Consumption, Income, and
Decision Making

5. Introduction
 You and everyone around you are
consumers and, as such, play an
important role in the economic system
 A consumer is any person or group that
buys or uses goods and services to satisfy
personal needs and wants

6. Introduction (cont.)
 Consumers buy a wide variety of things—
food, clothing, automobiles, movie tickets
and veterinary care
• In this section you’ll learn how to spend—
or not spend—your income wisely.

7. Discussion
• For most of the 20th century athletes were not
paid the millions of dollars that seem so
commonplace today. In fact, many players took
a second job during their off-season so they
could pay their bills. Yankees players Phil
Rizzuto and Yogi Berra even opened a men’s
clothing store.
• Would you be more likely to visit a store owned
by a famous celebrity than one owned by a non-
celebrity?
• Would you be willing to pay 10 percent more for
an item in the celebrity’s store?

8. Disposable and Discretionary
Income
 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

9. Disposable and Discretionary Income
(cont.)
 Education, occupation, experience, health,
location, and wages can all influence a
person’s ability to consume
• Spending income requires constant
decision making.

10. Disposable and Discretionary Income
(cont.)
 Consumer
Spending
The circle graph shows
how Americans spend
their income.

11. Disposable and Discretionary Income
Figure 3.3
Figure 1.2 (cont.)
Earning Power
The number of
years you are
educated has
a direct effect
on your income.

12. 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-, medium-, or high-quality item
• Rational choice is making a decision
based on opportunity costs.
• Rational consumers will all make different
choices.
• Choose the best quality item that is the
least expensive and will satisfy your
wants. 

13. Section 2
Buying Principles and
Strategies

14. Introduction
 The goal of advertisements is to win your
consumer dollars, and advertisers are
willing spend millions of dollars to attract
you attention to their products
• Because of the problems of scarce income
and time, however, your goal should be to
obtain the most satisfaction from your
limited income and time.

15. 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.

16. Using Advertising Wisely
 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.

17. Using Advertising Wisely
 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

18. Discussion Question
Why do you think bait and
switch advertising is illegal?

19. 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

20. CHAPTER 3
Section 3

21. Introduction
 Most Americans are concerned with the
reliability of the products and services
they use
 Many private groups and government
actions work to ensure the well-being of
consumers
 Consumers themselves, however, must be
proactive in their buying habits

22. 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

23. 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
 There are magazines and private consumer
groups that provide helpful information on
products.
• Federal agencies require consumer notification
and warranties.

24. Consumer Responsibilities
 Be informed about purchases
 Consumers need to initiate the
problem-solving process when a
product or service is faulty.
 Practice honest and ethical behavior
 Only return products with legitimate
faults