economic education for consumers ○ chapter 1 what’s ahead 1.1decisions, decisions 1.2make...
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
© 2010 South-Western, Cengage LearningSlide 11
WHAT’S AHEAD1.1 Decisions, Decisions1.2 Make Decisions1.3 Understand Economic Systems1.4 Consumer’s Role in the Economy1.5 Advertising and Consumer Decisions1.6 Be a Responsible Consumer
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
LESSON 1.1
Decisions, DecisionsGOALSGOALS►Identify several important values you
hold.►Explain how creating a life-span plan
helps you make better decisions.►Describe what an opportunity cost is.
© 2010 South-Western, Cengage LearningSlide 22
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMSKEY TERMS
values goals needs wants opportunity
cost
© 2010 South-Western, Cengage LearningSlide 33
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMS values – your principles-the standards
by which you live. goals – the things you want to
accomplish in your life. needs – things you cannot live without. wants – things that you would like to
have but can live without. opportunity cost – the value of your
next best alternative whenever you make a choice.
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
You’ve Got the Power►Values►Values change►Different people, different values
© 2010 South-Western, Cengage LearningSlide 55
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Goals►Needs and wants►Hopes and dreams►A life-span plan – a strategy people
create to help them achieve their life-span goals.
►Short-term goals – things you hope to accomplish within a year.
►Work to reach your goals – knowing your goals is just the first step. The next step is to plan how to reach them.
© 2010 South-Western, Cengage LearningSlide 66
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Opportunity Cost►Opportunity cost and decisions
► Every decision has an opportunity cost.
►Consider other options
© 2010 South-Western, Cengage LearningSlide 77
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
What are the various ways values can be classified?
How can creating a life-span plan help you make better decisions?
What is opportunity cost? Give an example.
© 2010 South-Western, Cengage LearningSlide 88
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
What are the various ways values can be classified?
Values are the principles, or standards, by which you live.
Life values Work values Cultural values Social values Demographic values
© 2010 South-Western, Cengage LearningSlide 99
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How can creating a life-span plan help you make better decisions?
• A life-span plan is a strategy you create to help you achieve your long-term goals.
• You can use this plan to help you make decisions and identify the actions to take as you work toward your goals.
© 2010 South-Western, Cengage LearningSlide 1010
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
What is opportunity cost? Give an example.
Opportunity cost is the value of your next best alternative whenever you make a choice. Examples: • go to college or get a job right now• save for a new car or take a vacation• go out for a nice dinner or do pizza and a movie tonight
© 2010 South-Western, Cengage LearningSlide 1111
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
LESSON 1.2
Make DecisionsGOALGOAL►Describe each of the five steps in the
decision making process.
© 2010 South-Western, Cengage LearningSlide 1212
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMKEY TERM
rational buying decision
© 2010 South-Western, Cengage LearningSlide 1313
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Decision Making Process►Specify►Search►Sift►Select►Study
© 2010 South-Western, Cengage LearningSlide 1414
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Specify►Need or want?►Goals►Values
© 2010 South-Western, Cengage LearningSlide 1515
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Search►Plan your search►Avoid impulse purchases
© 2010 South-Western, Cengage LearningSlide 1616
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Sift►Look at your options►Look at your opportunity costs
© 2010 South-Western, Cengage LearningSlide 1717
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Select►Compare the benefits and costs ►Decide
© 2010 South-Western, Cengage LearningSlide 1818
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Study►You can learn important lessons from the
results of your actions► Would you do the same thing again? If so, why?► If not, what would you do differently?
© 2010 South-Western, Cengage LearningSlide 1919
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Describe each of the five steps in the decision making process.
© 2010 South-Western, Cengage LearningSlide 2020
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Describe each of the five steps in the decision making process.
• Specify: Identify specific need or want; determine your
goals• Search: Gather information about your alternative
choices• Sift: Evaluate your options; consider your opportunity
costs• Select: Make a choice and act on it• Study: Evaluate the results of your choice
© 2010 South-Western, Cengage LearningSlide 2121
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1LESSON 1.3
Understand Economic Systems
GOALSGOALS►Describe four economic systems.►Explain how demand and supply work.
© 2010 South-Western, Cengage LearningSlide 2222
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMSKEY TERMS
production resources economics profit
scarcity demand supply equilibrium price
© 2010 South-Western, Cengage LearningSlide 2323
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Economic Systems►Traditional economy►Command economy►Market economy►Mixed economy
© 2010 South-Western, Cengage LearningSlide 2424
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Demand and Supply►Demand►Supply►Equilibrium
© 2010 South-Western, Cengage LearningSlide 2525
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
© 2010 South-Western, Cengage LearningSlide 2626
Quantity
y
Pri
ce
Demand curve
x
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
© 2010 South-Western, Cengage LearningSlide 2727
Quantity
y
Pri
ce
Supply curve
x
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
© 2010 South-Western, Cengage LearningSlide 2828
100Quantity
y
$1
Pri
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Demand curve
Supply curve
x
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
© 2010 South-Western, Cengage LearningSlide 2929
50 100 150Quantity
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$1
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Demand curve
Supply curve
$2
Surplus
x
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
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75 100 125Quantity
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Demand curve
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$0.50Shortage
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ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
What are the primary characteristics of each of the four economic systems?
How do demand and supply work together to determine prices and how much producers will produce?
© 2010 South-Western, Cengage LearningSlide 3131
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
What are the primary characteristics of each of the four economic systems?
• Traditional economy: the ways to produce products are passed from one generation to the next
• Command economy: the government owns most resources and makes most economic decisions
• Market economy: people, rather than the government, own the resources and run the businesses
• Mixed economy: a mixture of a market economy with some aspects of a command economy, for example
© 2010 South-Western, Cengage LearningSlide 3232
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How do demand and supply work together to determine prices and how much producers will produce?
• Producers are willing to offer more of a product for sale at a higher price than at a lower price
© 2010 South-Western, Cengage LearningSlide 3333
Quantity
Pri
ce
Supply curve
• As the price rises, the quantity supplied increases (and price decreases)
• As price decreases, the quantity supplied decreases (and price increases)
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1LESSON 1.4
Consumer’s Role in the Economy
GOALGOAL►Explain the role of consumers in
determining what is produced in a market economy.
© 2010 South-Western, Cengage LearningSlide 3434
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMSKEY TERMS
consumer consumer
economics
© 2010 South-Western, Cengage LearningSlide 3535
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Making Decisions in a Market Economy►Information for the economy►Prices►The profit motive►Consumer economics►Consumers in charge►Benefits of competition►Efficiency and profits
© 2010 South-Western, Cengage LearningSlide 3636
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How do demand and supply act together in a market economy to set the equilibrium price for a product?
© 2010 South-Western, Cengage LearningSlide 3737
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How do demand and supply act together in a market economy to set the equilibrium price for a product?
• Profits result from selling products for more than it costs to make them
• To earn a profit, businesses must produce products that consumers buy
• When consumers spend their money, they determine what products are produced
• At the equilibrium price, consumers are willing and able to buy the same amount of the product as producers are willing and able to supply
© 2010 South-Western, Cengage LearningSlide 3838
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1LESSON 1.5Advertising and Consumer Decisions
GOALSGOALS►Describe different types of advertising.►Explain how you can recognize deceptive
advertising.
© 2010 South-Western, Cengage LearningSlide 3939
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMSKEY TERMS
advertising puffery
© 2010 South-Western, Cengage LearningSlide 4040
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMS advertising – a paid form of
communication sent out by a business about its product or service.
puffery – innocent exaggeration in advertising.
(Note: Puffery is legal, Deceptive advertising is not).
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Types of Advertising► Brand advertising – designed to cause you to
remember a particular brand name.► Informative advertising – designed to influence you
to buy a product by educating you about the product’s benefits.
► Comparative advertising – designed to convince you to buy the advertised product instead of a targeted competing product.
► Defensive advertising – designed as a counter-attack to respond to claims made by other companies.
► Persuasive advertising – designed to appeal to your emotions to influence you to buy.
© 2010 South-Western, Cengage LearningSlide 4242
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Deceptive Ads versus Puffery►Puffery►Factually wrong►Exaggerated claims are legal►Is it free?►Protecting yourself from deceptive
advertising
© 2010 South-Western, Cengage LearningSlide 4343
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Identify and describe characteristics of each of the types of advertising presented in this lesson.
How can you recognize and protect yourself from deceptive advertising?
© 2010 South-Western, Cengage LearningSlide 4444
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Identify and describe characteristics of each of the types of advertising presented in this lesson.
• Brand advertising: helps consumers to recognize brand name
• Informative advertising: influences buying behavior by educating the consumer
• Comparative advertising: compares product qualities to competing products’ qualities
• Defensive advertising: counters competitors’ advertising claims
• Persuasive advertising: appeals to consumers’ emotions
© 2010 South-Western, Cengage LearningSlide 4545
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How can you recognize and protect yourself from deceptive advertising?
• Approach buying decisions in an
organized, logical manner• Gather information from several sources
(in addition to the advertisement)• Evaluate the information • Consider alternative choices
© 2010 South-Western, Cengage LearningSlide 4646
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1LESSON 1.6
Be a Responsible ConsumerGOALSGOALS►Identify ways in which your consumer
decisions affect other people.►Explain why you should use resources
responsibly.
© 2010 South-Western, Cengage LearningSlide 4747
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
KEY TERMKEY TERM
global warming
© 2010 South-Western, Cengage LearningSlide 4848
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Consumers in Society►Sharing limited resources►Protecting public safety
© 2010 South-Western, Cengage LearningSlide 4949
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
Using Natural Resources►Resource consuming products►Water►Forest products►The environment►Encourage business responsibility►Dispose of waste responsibly►Respect your neighbors
© 2010 South-Western, Cengage LearningSlide 5050
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How can your consumer choices affect the people around you?
What can you do to be a more environmentally responsible consumer?
© 2010 South-Western, Cengage LearningSlide 5151
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
How can your consumer choices affect the people around you?
• The earth’s natural resources are limited and not quickly replaced
• To be environmentally responsible, use resources in moderation and recycle or conserve them
© 2010 South-Western, Cengage LearningSlide 5252
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 1
What can you do to be a more environmentally responsible consumer?
• Consider how your choices affect the use of resources and their impact on the environment
• Dispose of waste responsibly • Encourage businesses to act responsibly
through your buying decisions• Recognize that you live in a world community
and act with consideration toward others
© 2010 South-Western, Cengage LearningSlide 5353