1. Ch 3 Notes
Purchasing power

2. DO NOW
Can you think of anything that costs more today than it did 5-10 years ago?

3. To explain inflation and how it is measured
Today we will learn
To explain inflation and how it is measured

4. Inflation and the value of money
3.1
Inflation and the value of money

5. When prices rise faster than income, buyers lose purchasing power
What is inflation?
Inflation - Increase in the general level of prices for goods and services
When prices rise faster than income, buyers lose purchasing power

6. What is inflation?
Inflation is measured by the US government by using the : CPI – Consumer Price Index The CPI is a collection of hundreds of goods and services and their prices from 1 year ago to today

7. What is inflation?
When inflation rises, you must earn more income to maintain same standard of living

8. What are causes of inflation?
Demand-Pull Inflation Higher prices as a result of consumers wanting to buy more goods and services than producers supply This is the most common cause

9. What are causes of inflation?
Cost-Push Inflation
Prices rise as a result of rising production costs
This is due to productivity, not scarcity

10. What are causes of inflation?
Real-Cost Inflation Rising prices due to scarce resources or increased difficulty in obtaining resources

11. (consider your income)
Question
The CPI measures changes in price over time. Explain how the rate of inflation is related to your purchasing power and how it might affect you on a daily basis
(consider your income)

12. Do Now
Can you have deflation?
Give an example

13. What are types of inflation?
Disinflation
Rising prices with the rate of increase slowing down
Reflation
high prices followed by lower prices and then high prices again

14. What are types of inflation?
Hyperinflation
Rapidly rising prices that are out of control
Consumers spend $ as fast as they can in fear that prices will get even higher (“increase in demand”)
Deflation
Decrease in prices

15. What are effects of inflation?
Employment – rising inflation is often a result of increased demand = increased employment rate
Spending, Saving, and Investing
Time Value of Money – concept stating “a dollar you receive in the future will be worth less than a dollar you receive today”

16. Lesson Assessment Pg 84 q 1-10
Exit Ticket
Lesson Assessment Pg 84 q 1-10

17. Prices and consumer choices
3.2
Prices and consumer choices

18. Can consumers affect the price of things?
Do Now
Can consumers affect the price of things?
Why or why not?

19. How Prices are Set in a Market Economy
Today We wIll Learn
How Prices are Set in a Market Economy
How prices are set at the Retail level

20. How are prices set in a market economy?
Normal Profit: The lowest amount of profit that a business needs in order to stay in business. Essentially, cover all costs

21. How are prices set in a market economy?
Both Producers and consumers affect prices. There are 4 basic types of pricing systems:
1. Cost-Recovery Pricing:
High introductory price to recover R&D costs
Invites competition, like generics

22. How are prices set in a market economy?
2. Cost-Plus Pricing
Based on production cost plus mark-up
Markup = Cost + (markup% x cost)
Ex. 40% markup on a chair that costs the manufacturer $57 to make =
.40 x $57 = $ Add $ $57 = $77.80

23. How are prices set in a market economy?
3. Value-Based Pricing Based on how much consumers are willing to pay (market research) Set price as high as possible Examples?

24. How are prices set in a market economy?
4. Market-Based Pricing Setting prices to be competitive with prices of similar products currently being sold.

25. TAKE A CHROMEBOOK GOOGLE: SHOPIFY 9 STRATEGIES
Read: 9 Strategies for Profitably Pricing Your Retail Products
Think of a store or restaurant (fast food is ok) in which you go to.
Which of the Shopify strategies do you think they use?
Give specific examples
Why do you think they use these strategies?

26. How do buying strategies affect prices?
Buying motive : reasons for making a purchase
There are 3 main types of buying processes
Rational
Emotional
Impulse

27. How do buying strategies affect prices?
Rational :based on need, want, or logic 2 strategies for rational buying Economizing – saving as much as possible and spending $ only when necessary Optimizing – getting highest value for money spent (buying larger quantities or better quality products)

28. How do buying strategies affect prices?
2. Emotional –based on feelings, rather than logic 3. Impulse buying – purchasing without planning Impulse is typically low cost items

29. Name 4 methods sellers use to price products?
Exit Ticket
Name 4 methods sellers use to price products?
How is economizing different from optimizing?

30. Getting more for your money
3.3
Getting more for your money

31. What do you think makes up a brand?
Do Now
What do you think makes up a brand?

32. To describe selling strategies
Today we will learn
To describe selling strategies

33. What are selling strategies?
Companies meet demand by satisfying wants and needs in 3 basic ways:
Convenience
Customer Service
Right product and price

34. What are selling strategies?
Convenience:
Location of store, multiple payment options, etc.
Hello internet!!

35. What are selling strategies?
2. Customer Service: warm, friendly greetings, prompt help, etc Give an example where good customer service is very important Give an example where it is not

36. What are selling strategies?
3. Right product and price
Branding strategy – carrying well-known brand names to attract loyal customers
Discount pricing – offering lowest everyday prices

37. What are selling strategies?
Creating Demand:
The primary method that businesses use to create demand is through advertising
Advertising is the way of informing consumers about products and encouraging them to buy
Create ad for target audience – specific group of people

38. What are selling strategies?
Types of Ads:
Newspapers and Mags. – cheap, large audience, different formats, no targeting
TV and radio – expensive, large audience, target by channel/time
Internet – target by website, track by click, annoying
Billboards, brochures, signs – mass appeal, no targeting
Direct advertising – sent directly to consumers (free samples, coupons, etc.)
Transit advertising – print ads on public transportation

39. What are the 3 ways businesses meet demand? Name 4 types of ads
Exit Ticket
What are the 3 ways businesses meet demand?
Name 4 types of ads

40. Do Now
Ok – so we know that sellers have strategies, are there some strategies we can have as buyers?
Name some

41. What are consumer buying strategies?
Before you shop
Make a list
Decide how you will pay
Decide how much you can spend

42. What are consumer buying strategies?
While you shop
Avoid impulse buying
Check prices for best deals (Comparison Shopping)

43. What are consumer buying strategies?
After you shop
Keep receipts and warranties
Evaluate purchase
Become a loyal customer
Discuss timed price guarantee Best Buy

44. What are consumer buying strategies?
Online Shopping
Check shipping costs
Confirm return policy and cost to return
Make sure company is legit

45. What are consumer buying strategies?
Comparison Shopping
Check prices across many sellers
Thank you internet!!

46. For # 20 just think of 1 example
Exit Ticket
Think Critically:
Pg 100 q 19 and 20
For # 20 just think of 1 example

47. Consumer rights and responsibilities
3.4
Consumer rights and responsibilities

48. Have your consumer rights ever been violated? How?
Do Now
Have your consumer rights ever been violated?
How?

49. To describe consumer rights Identify sources of consumer protection
Today we will learn
To describe consumer rights
Identify sources of consumer protection

50. Consumer Rights
Consumer Bill of Rights of 1962 granted the following rights:
Remedy
Informed “ Textbook slightly different”
Choose
Heard
Educated
Safety
Service

51. Technology Bill of Rights
Rights are listed involving:
Time Shifting
Space shifting
Backing up
Translating

52. Patient’s Bill of Rights
Rights are listed involving:
Disclosure
Choice of Providers
Access to Emergency Services
Treatment decisions
Confidentiality
Make sure you read the textbook pg

53. Consumer protection laws
2 of the more important Consumer Protection Laws are:
FDCA (Food, Drug, and Cosmetic Act) – ensures safety and effectiveness
HIPAA (Health Insurance Portability and Accountability Act) – protects your health and billing info – limits access

54. Sources of consumer protection
Federal Agencies include
FDA (Food and Drug Administration) – ensures safety
CPSC (Consumer Product Safety Commission) - recalls
FCC (Federal Communication Commission) – tv and radio
FTC (Federal Trade Commission) – restricts unfair practices

55. Sources of consumer protection
Private Organizations
BBB (Better Business Bureau) – relationships with local businesses
YELP!
Angie’s List

56. What are the parts of the Technology Bll of Rights?
Exit Ticket
What are the parts of the Technology Bll of Rights?

57. Explain a time when you were deceived?
Do Now
Explain a time when you were deceived?

58. How are consumers defrauded?
Deception: False or misleading claims made about a product
Types:
Bait and Switch
Low Balling
Pyramid Scheme – multilevel gimmick
Usually requires a cash investment

59. How are consumers defrauded?
Ponzi Scheme
Pigeon Drop
Fraudulent Representation – donating to a phony charity
Infomercials – hidden commitments

60. How can consumers protect themselves?
Read out loud Pg 108: Figure 3-4.1
Go over Computing unit prices Pg 109

61. Assignment
Think Critically:
Pg 112 q. 27