Your Role as a Consumer
Your Role as a Consumer. Chapter 3. Consumption, Income, and Decision Making. Consumer : Any person or group that buys or uses goods and services to satisfy personal wants Purchases are based on income and how much is chosen to spend or save.
Your Role as a Consumer
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Presentation Transcript
Your Role as a Consumer Chapter 3
Consumption, Income, and Decision Making • Consumer: • Any person or group that buys or uses goods and services to satisfy personal wants • Purchases are based on income and how much is chosen to spend or save
Consumption, Income, and Decision Making • Disposable Income • The money left over after taxes have been paid • Usually buy necessities first: food, clothing, and housing • Discretionary Income • Income which can be spent on extras such as entertainment and luxuries
Consumption, Income, and Decision Making Factors that impact a person’s earning power: • Education • Age • Health • Occupation • Inheritance ($, property) • Gender • Location • City dwellers earn more than rural areas • Regional incomes vary
Consumption, Income, and Decision Making • Decision Making • Do I by an item or not? • Scarce resources (time and money) • Time spent on deciding what to buy • Opportunity Cost (value of the highest alternative choice you DIDN’T make) • High quality product cost more than comparable low quality product • Rational Choice (when you make consumer decisions based on opportunity costs or the alternative that has the greatest value) • Choosing the item that is the least expensive from among comparable quality products • Choice varies from person to person (What do you value??)
