1. Daily Information – 10/17 Objectives: 1. Describe methods of setting prices in a market economy 2. Explain consumer buying strategies. Warm Up: You have 5 minutes to complete the activity from yesterday “Fighting Inflation” Agenda: 1.Complete the warm up 2.Define vocab. 3.Making purchases P.P. 4.Fill in the blank activity

2. Fighting Inflation How do actions of the Fed affect your life and that of your family? When the Fed raises interest rates, consumers find it harder to borrow and repay loans. When rates are low, loans are easier to obtain and repay. This directly affects a family’s ability to make and repay large purchases on credit

3. Fighting Inflation How does raising tax rates help curb inflation? Generally, tax increases decrease disposable income and purchasing power. As we spend less, the inflation rate decreases.

4. Cost-recovery (R&D costs) Cost-plus (production costs plus a markup) Value-based (what consumers are willing to pay) Market-based (competitive with similar products)

5. Rational buying o Economizing is saving money and spending only when necessary. o Optimizing is getting the highest value for money spent. Emotional buying – desire rather than logic (sad, angry) Impulse buying – spur of the moment without any planning

6. Convenience Customer service Appeal to the needs and wants of customers Brands and loyalty Discount pricing (lowest price possible)

7. Advertise to target audience What are some of the ways a business can advertise? T.V. Radio Billboards Loyalty Programs Magazine Internet Home Mailings Transit

8. Before You Shop Research and plan (create lists) While You Shop Avoid impulse and emotional buying After You Buy Keep receipts and warranties

9. The Consumer Bill of Rights of 1962 Having the right to….. Safety Be informed Choose Be heard Redress (compensation for complaints and injuries) Consumer education

10. Food, Drug, and Cosmetic Act of 1938 Safe, pure, and wholesome Hazardous Substances Act of 1960 Warning labels HIPAA of 1996 Limit access to health and medical billing

11. Federal agencies o Examples: USDA, FDA, CPSC, FTC, SEC State and local assistance Public Officials Private Organizations

12. Bait and Switch Fake Sales Low-Balling Pyramid Schemes Ponzi Schemes Infomercials

13. Identify deceptive practices Shop smart Stay informed Seek redress (remedy the problem)

14. Group Activity Fill in the blank activity