chapter 2 consumers in economy

Question 1

MDOA aspects of business conduct that can reduce sovereignty of consumers

Answer 1

1. marketing
2. misleading/deceptive conduct
3. planned obsolescence
4. anti-competitive behaviour

Question 2

how does (manipulative) marketing reduce consumer sovereignty

Answer 2

advertising exert power over spending patterns of consumers
-some informative
-most place strong emphasis on understanding target consumer to influence behaviour
-marketers extensively research desires, interests and use as basis for MASS marketing(radio) & DIRECT marketing (targeted social media ads, influencers)

Question 3

how does misleading/deceptive conduct reduce consumer sovereignty

Answer 3

consumers deceived by false claims about product –> pay for items do not want
-weight loss supplements, anti-aging

Question 4

how does planned obsolescence reduce consumer sovereignty

Answer 4

firms prduce goods designed to wear out/expire quickly to encourage consumers to make more purchases in future
-emphasise importance of keeping up with latest tech and recent products, firms manipulate ppl to buy product more often than should

Question 5

how does anti-competitive behaviour affect consumer sovereignty

Answer 5

markets with few sellers diminish ability
-reduce customer choice
-manipulate consumers to purchase more products from same business
eg. bus manufacture electronics so only company’s brand eg. batteries compatible.

Question 6

Y = C + S

consumers received

Answer 6

Y= disposable (after tax) income

C = Consumption expenditure

S = Savings