HDFS 239 - Exam 1 Review Graded A+

A movement whose objectives is to ensure that the consumer will pay a fair price for quality goods and services in the marketplace - ANSWER-Consumerism -Organizations and/or individuals fighting to protect the interests of consumers -*Actions aimed at protecting and enhancing the right of buyers* - ANSWER-Consumer Movement The total of wages, rent, interest, dividends, transfer payments, and unincorporated net income - ANSWER-Personal income The idea that meeting consumers' needs is the primary function of the economy - ANSWER-Consumer sovereignty founded in 1899 and continues to promote consumer interests - ANSWER-National Consumer League let the buyer beware - ANSWER-"Caveat Emptor" -Mass production -Broader distribution -Pre WWII - ANSWER-Era One -Quality assurance and convenience -Expanded demand -Shifted power from retailers no longer about best price, but about demand for a brand - ANSWER-Branding and Advertising -Competition -Safety and Quality - ANSWER-Problems of Industrialization -Center for the Study of Responsive Law -"Nader's Raiders" -*Not a government employee* -Unsafe at Any Speed (1965) book - National Traffic & Motor Vehicle Safety Act -Considered to be the most influential consumer advocate in US history - ANSWER-Ralph Nader Made by Harvey W. Wiley to educate about the dangers of chemicals in food supply (1903) - ANSWER-"The Poison Squad" Required that new drugs be tested for effectiveness as well as safety before being released on the market - ANSWER-Federal Food, Drug, and Cosmetics Act Amendments of 1962 caused birth defects - ANSWER-Thalidomide -The 1906 Food and Drug Act was now virtually obsolete and unenforceable - public education campaign, resulting in the Federal Food, Drug and Cosmetic Act to pass - ANSWER-"The Chamber of Horrors" Made people go blind - ANSWER-"Lash Lure" product -Branding and advertising -Product safety -Pure Food and Drug Act (1906) -The First Consumer Expose - ANSWER-Key Influences in Era One -Consumer Unions -Changing Consumption -Aggressive salesmanship -Rising discretionary income - ANSWER-Key Influences in Era Two -Post WWII -Changing Consumption - ANSWER-Era Two -Consumer bill of rights -Journalism and politics -Consumers eager to spend wartime savings -Inflation -New products - ANSWER-Era Three Original Consumer Rights under President Kennedy -Right to safety -Right to be Informed -Right to choose -Right to be heard Subsequent Consumer Rights added after President Kennedy (1985) -Right to redress -Right of consumer education -Right of environmental health -Right of service - ANSWER-Consumer bill of rights -In short supply -Not all wants will be satisfied - ANSWER-Scarcity Choices (Ties) - ANSWER-Variety A tax on imported goods - ANSWER-Tariff A limit placed on the quantities of a product that can be imported - ANSWER-Quota Defined as a state of pleasurable contentment with one's condition in life - ANSWER-Economic Happiness Expenditures for public needs, such as education, highways, and police - ANSWER-Collective Consumption -Book, Silent Spring, showed widespread use of DDT and other chemicals - ANSWER-Rachel Carson the amount of pay one recieves - ANSWER-Money income the amount of goods and services that one's money income will purchase - ANSWER-Real income the satisfaction gained in consuming the goods and services purchased with one's income - ANSWER-Psychic Income In 1937, a "miracle" drug named Sulfanilamide was blamed for the death of over 100 people due to an individual chemist purposefully adding alcohol to the formula. Nothing could be done to the chemist or the drug maker because they were not required to test the drug for safety. - ANSWER-True Without proper labeling, average consumers cannot determine the quality of many food products, or other products they buy such as gasoline or many technological goods. They are also not likely able to test the accuracy of a producers claims until after the product is purchased. - ANSWER-True the power of an economic product or service to satisfy a human want - ANSWER-Utility selling fake cures - ANSWER-the term "Snake Oil" many retailers going bankrupt - ANSWER-"The Great Retail Apocalypse of 2017" an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade block in North America. - ANSWER-North American free trade agreement (NAFTA) a market condition where no restriction on the number of buyers exists - ANSWER-Multiopsony An aspect of psychology have significant effects on people's choices of goods and services - ANSWER-The senses US - ANSWER--debt economy -mixed economy Forer (Barnum) Effect - ANSWER--giving high accuracy ratings to descriptions of their personality although they are vague and general -People easily identify and accept information that is favorable to them and/or their personal belief system -Ex: Astrology, psychic readings, horoscopes, talking to the dead Choice overload - ANSWER-Decision-making is more complicated More than 2,500 new products introduced each year Halo effect - ANSWER-the tendency for an impression created in one area to influence opinion in another area MSRP - ANSWER-price of a product is the price at which the manufacturer recommends that the retailer sell the product. Overconfidence - ANSWER--Humans tend to be overly optimistic about their own lot -Overestimate the odds of a good outcome Ignorant-consumer standard - ANSWER-a standard based on the assumption that the law should protect even consumers who are ignorant, careless, and wasteful reasonable-consumer standard - ANSWER-a standard based on the assumption that the government should protect consumers but also that consumers have the responsibility to be informed and rational Human decision making process - ANSWER-1. Identify options 2. Evaluate each option 3. Select option that is most attractive Food Allergen Labeling and Consumer Protection Act of 2004 - ANSWER-addresses, among other issues, the labeling of foods that contain certain food allergens. Fair Packaging and Labeling Act - ANSWER-directs the Federal Trade Commission and the Food and Drug Administration to issue regulations requiring that all "consumer commodities" be labeled to disclose net contents, identity of commodity, and name and place of business of the product's manufacturer, packer, or distributor Wealth - ANSWER--goods and services that promote the well-being of others -Ex: Education, healthcare, shelter, food, clothing, etc