Consumer Ed And Personal Finance Exam 2

Front 1

defensive advertising

Back 1

when a competing firm makes untrue or misleading claims about their products

Front 2

Persuasive advertising

Back 2

used by businesses to persuade consumers that they will be happier or that their lives will be better if they buy that firm's products

Front 3

Demand

Back 3

a willingness and ability to buy a product at a particular price

Front 4

Comparative advertising

Back 4

used by many firms to show differences between their products and similar goods or services produced by other firms.

Front 5

Bait and Switch

Back 5

ploy used to encourage consumers to purchase products that are more expensive than those that have been advertised.

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Market Power

Back 6

gives firms ability to often be able to charge higher prices for its products and therefore earn a greater profit than other firms

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Comparison Shopping

Back 7

allows consumers to be better at evaluating the value of advertisements for competing products they may buy

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Supply

Back 8

A willingness and ability to sell a product at a particular price

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Counter Advertising

Back 9

new advertising that is undertaken pursuant to a Federal Trade Commision order for the purpose of correcting earlier false claims made about a product

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informative advertising

Back 10

advertising that simply informs. Firms hope that the facts it provides will cause consumers to buy that business's products

Front 11

fraud

Back 11

For a claim to be fraud, the person who makes the claim must know that it is false and use it to obtain something he or she is not entitled to

Front 12

pyramid scheme

Back 12

an illegal sales plan through which people collect fees and a share of income earned from sales made by other individuals they recruit into the program. People are only able to recieve large amounts or money if they get in early and recruit many other people to join as well

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cooling - off period

Back 13

a specific amount of time in which a consumer has the right to reconsider and back out of a transaction

Front 14

True name fraud

Back 14

also known as "identity theft". It's a crime in which a thief uses a person's Social Security Number and other info to assume the person's identity as a consumer, borrower, saver, and investor

Front 15

Cease and desist order

Back 15

an administrative or judicial order commanding a business firm to cease conducting the activities that the agency or a court has deemed to be "unfair or deceptive acts or practices."

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consumer advertising

Back 16

form of advertising that the FTC can require firms to have to tell consumers the truth

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luxury goods

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a good whose purchase increases more than in proportion to increases in income. i.e. jewelry, gourmet foods, sports cars can usually fall into this category. Products that are enjoyable but not necessary

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inflation

Back 18

Inflation may increase the amt they must spend for many products over time

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Money Price

Back 19

Type of consumers that pay for a good or service and does not consider changes in the prices of other consumer products

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Time Sharing Plan

Back 20

Consumers own the use of a facility for a specific time in each year.

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Bed N Breakfast

Back 21

a business run by an individual who rents rooms in his or her home and provides breakfasts to travelers

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Fixed Expenses

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expenses that occur at specific times and cannot be altered. Once a house is purchased or rented, a house payment is considered a fixed expense; so is a car payment.

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Flexible Expenses

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expenses that can be changed in the short run. The amount of money you spend on food can be considered a flexible expense because you can buy higher - or lower quality food than you now are buying. These are also known as variable expenses.

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cost/benefit analysis

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A process by which business decisions are analyzed. The benefits of a given situation or business-related action are summed and then the costs associated with taking that action are subtracted.

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values

Back 25

diffrent consumers choose different types of spending because they have different "values"

Front 26

relative price

Back 26

Relative prices just refers to the ratio of prices. For example, if the price of gasoline is $0.25 per gallon and the wage rate is $1.00 per hour then the relative price of gasoline is 0.25 hours of labor per gallon...a products "relative price" takes changes in the prices of other products into consideration