Wednesday Fun Fact Wednesday!!!!! BB, Christina & Kaley… test tomorrow Bring headphones tomorrow – substitute Notes today on the beginning of chapter 3

Take it Seriously!!!! End of marking period is creeping up 11/9 & that marks our ½ way point– you’re old enough to be taking on responsibilities & need to recognize the freedoms in this class… don’t take advantage!!! Auction – Monday was not so great… You signed off on requirements – get a binder this weekend!!! You will be tracking your daily spending & income habits for this entire chapter – we’ll talk more about that Friday/ decorate our record books

Chapter 3 Practical Economics: Your Role as a Consumer Consumption, Income & Decision Making Buyers & sellers interact in markets Market prices are set by buyers’ levels of supply & demand This chapter = how to budge, spend wisely & save a serious amount of dough$$$

Are you a SAVER or a SPENDER??? Neither is necessarily better than the other Neither is necessarily better than the other Wise buying decisions NOW will help you meet your long-term financial goals LATER Wise buying decisions NOW will help you meet your long-term financial goals LATER

Consumer: any person/ group that buys or uses goods/ services to satisfy personal needs & wants Your ability to spend (or consume) depends on available income & how much of it you choose to save or spend Your ability to spend (or consume) depends on available income & how much of it you choose to save or spend Disposable Income: money remaining for a person to spend or save after all taxes/ debts have been paid Disposable Income: money remaining for a person to spend or save after all taxes/ debts have been paid – 1. Necessities: food, clothing, housing – 2. Discretionary income: money a person has left after necessities have been bought to spend on extras or save

Your earning power (ability to consume/ make an income) depends on 5 factors Education Job Experience Health Environment **what are examples of each that could result in you belonging to a lower, middle or upper class?**

Think about a recent purchase you made & what the reasons were for buying it – get specific! How many times do you ACTUALLY THINK about the reasons for the purchase you are about to make? Do you concentrate on NEED FIRST & WANT SECOND??? Do you consider TRADE-OFFS involved? (who remembers what a trade-off is???)

All consumer decisions involve 3 main considerations: 1. Scarce Resources 2. Opportunity Cost 2. Rational Choice

Scarce Resources Time & money are our scarce resources – remember: scarcity always exists… even if you’re loaded, you don’t have all the time in the world, if you have a ton of free time, you most likely are not rolling in $$ You need to invest TIME in learning about a product you wish to buy – price comparison, pictures, consumer ratings, feedback from friends/ family, old or new You obviously need to invest MONEY in ultimately buying the product

Opportunity Cost Remember: your opportunity cost is the value of your “plan B” -- it is the value of the next best thing you would have done/ chosen In buying an item, you should think about the quality of the item you are potentially buying – What does “value versus volume” mean?

General Consumer Spending

High-quality products cost more than lower-quality products Nike flats on sale at Sports Authority versus Nike Hyperdunk – let’s say the Hypers are $80 more than the others If you choose the higher priced shoe, you sacrifice $80 The opportunity cost of the Hypers over the flats is whatever else you would have bought with that $80 Remember: NEED then WANT!!! – Do you need the Hypers or do you want them? – Will it improve your performance or is it just totally awesome?

Rational Choice: choosing the best-quality alternative/ item that is the least expensive from among comparable-quality products (finding a middle ground…great item + manageable price) Each person’s value system for his/ her needs & wants is different Analyzing these 3 aspects of consumer decisions will give you the greatest possible chance of obtaining the things you NEED then WANT

For Homework Due Friday Print out the following – each image should be about the size of ¼ a sheet of computer paper – ONE item you deeply desire/ want to save up to buy--- give this some SERIOUS thought, it will be a point of focus for the next few weeks – ONE item/ type of item(s) that is your weakness. This should be a temptation that you want, don’t need & are looking to cut out to save $$

Spare Time?..... Start listing major purchases you’ve made since the beginning of the summer until now… This will be the first entry in your activity piece for Friday

Your Role as a Consumer (circle one) SPENDER or SAVER __________________: any person/ group that buys or uses goods/ services to satisfy personal needs & wants - Your ability to spend (or consume) depends on available income & how much of it you choose to save or spend ______________Income: money remaining for a person to spend or save after all taxes/ debts have been paid 1. ___________________: food, clothing, housing 2. _______________________________: money a person has left after necessities have been bought to spend on extras or save Your earning power depends on 5 factors Education _________ Experience _________ Environment Think about a recent purchase you made & what the reasons were for buying it - How many times do you ACTUALLY THINK about the reasons for the purchase you are about to make? - Do you concentrate on ___________________& _____________________??? - Do you consider TRADE-OFFS involved? All consumer decisions involve 3 main considerations: 1. _________________________ 2. _________________________ 3. _________________________ Scarce Resources -__________& ____________are our scarce resources -You need to invest TIME in learning about a product you wish to buy *_______________________________, pictures, consumer ratings, feedback from friends/ family, old or new - You obviously need to invest MONEY in ultimately buying the product Opportunity Cost - Remember: your opportunity cost is the value of your “plan B” -- it is the value of the next best thing you would have done/ chosen - In buying an item, you should think about the ____________________of the item you are potentially buying *What does “_____________________________________” mean? Rational Choice: choosing the _____________________________/ item that is the least expensive from among comparable-quality products (finding a middle ground…_____________________+ ________________________) - Each person’s value system for his/ her needs & wants is different - Analyzing these 3 aspects of consumer decisions will give you the greatest possible chance of obtaining the things you ______________then _______________