Consumer and Financial Decisions

Question 1

What is a Consumer decisions?

Answer 1

A consumer is someone who purchases goods and services to satisfy needs and wants

Question 2

what is the basic economic problem?

Answer 2

Our wants are unlimited:
Resources are scarce → resources we have to satisfy our wants are limited. The economic problem is essentially about trying to allocate our limited resources for the satisfaction of our unlimited and competing wants.

Question 3

what are the factors influencing consumer and financial decisions

Answer 3

Advertising
Age
Convenience
Culture
Customer service
Disposable income
Environmental consideration
Social media

Question 4

what is comparison shopping?

Answer 4

often the same product costs different amounts at different stores or sites. Shopping around to obtain the best deal

Question 5

What is a generic product?

Answer 5

are products that are named only by their basic product type, and not an individual brand.

Question 6

what is LOCALLY shopping

Answer 6

The local convenience store or shopping region (takeaway, newsagent and grocer) will frequently be used by consumers who live nearby. The local community will often shop here because of the convenient location. However, their purchases are restricted to only a few basic items.

Question 7

what is REGIONALLY shopping

Answer 7

Department stores, discount department stores and supermarkets are often located in large regional shopping complexes, such as Westfield centres, and are surrounded by numerous specialty stores. The stores are in one convenient location and there is ample parking provided. Usually includes cinemas and food halls. Customers often travel from surrounding suburbs.

Question 8

what is INTERSTATE & GLOBALLY shopping

Answer 8

Nowadays consumers can purchase goods from another state or country. We live in a global world → consumers are no longer restricted to their local or regional shopping centres. Consequently, consumers in search of a specific item, cheaper prices or greater variety will often decide to purchase from a global marketplace.

Question 9

what are the different payment options

Answer 9

cash, credit, paypal, store credit, DEBIT CARD AND BPAY, cheques

Question 10

what is a cheques

Answer 10

A cheque is a written communication ordering your financial institution, called the drawee, to pay a person a specific amount of money → the payee. The person authorising the transaction is termed the drawer.

Question 11

what is debit card and bpay

Answer 11

With a debit card, you are using your own money, by electronically accessing money already in your account. You pay no interest and can spend up to your account balance.
BPAY® is another type of electronic payment method → uses the telephone or internet to transfer funds from your cheque, savings or credit card account to the account of the business you wish to pay.

Question 12

what is store credit

Answer 12

Some large stores or retail groups issue their own cards that operate like regular credit cards. These cards usually are associated with special deals, discounts, bonuses and a rewards program. However, these cards usually have higher interest rates and fewer interest-free days than regular credit cards.

Question 13

what is paypal

Answer 13

Most online merchants accept PayPal as one of their methods of payments. PayPal is an intermediary where you end up paying for the good using your credit card, bank account or money stored in your PayPal account. An advantage of using Paypal is the security → can receive a refund if there is a problem with the transaction.

Question 14

what is credit

Answer 14

Credit is the supply of money now in return for the promise of paying it back later. Credit allows you to buy what you want immediately and pay for it later → upfront or monthly payments.

Question 15

what is cash

Answer 15

Cash are the notes and coins (money) issued by the federal government.

Question 16

what is lay-by

Answer 16

Lay-by’s require the customer to pay a deposit and then the store puts aside the good for you.

Question 17

what is after-pay

Answer 17

Afterpay is a digital service linked to a customer’s credit or debit card and enables consumers to ‘buy now, pay later’ → purchase something at the current price and pay it off in four equal instalments every two weeks.

Question 18

what is fixed expenses

Answer 18

Fixed expenses are those expenses that you do not have much control over. These expenses remain the same over a period of time. Examples include your bus or train fare, rent and Gym membership.

Question 19

what is variable expenses

Answer 19

Variable expenses are those expenses that you have some control over. They are expenses that change over time. Examples include purchasing clothes or food.

Question 20

what is savings

Answer 20

Savings is the part of income that is not spent. It is put aside to build up for a range of different reasons.
eg. Purchase expensive items in the future such as a home, car or boat.
Save for a holiday
Have funds available in the case of an emergency
Earn interest on their invested money
Have money to live on when you retire and stop working.

Question 21

what is budgeting

Answer 21

A budget is an organised way of managing finances → gives an overall picture of where your money is coming from, when it’s coming in and when it’s being spent.

Question 22

why is budgeting important of teenages

Answer 22

To save for large purchases in the future or even short term goals
Teaches independence and responsibility
Teaches basic budgeting skills involving math, organisational and logic skills
Many jobs pay teens well and it is essential to teach budgeting early so to avoid careless spending.

Question 23

what is the law that protects consumers

Answer 23

Competition and Consumer Act 2010 (Cwlth)
Fair Trading Act 1987 (NSW)

Question 24

what is unconscionable act

Answer 24

Under the Competition and Consumer Act, an unconscionable act by a seller is any practice that is just not reasonable, such as scams and rip-offs.

Question 25

what is a contract

Answer 25

A contract is a legally enforceable agreement between two or more persons or parties. The contract outlines the details of the agreement and the rights and responsibilities (obligations) of each of the parties.

A contract can be an oral (verbal) agreement. Agreements that involve large sums of money, such as when buying a house, are usually put in writing

Question 26

what are the features of a simple contract

Answer 26

1. offer
2. acceptance
3. consideration

Question 27

what is a offer

Answer 27

An offer is a proposal → involves one of the parties offering something of value (for example, money) to the other party in the agreement.

Question 28

what is acceptance

Answer 28

An offer is a proposal → involves one of the parties offering something of value (for example, money) to the other party in the agreement.

Question 29

what is consideration

Answer 29

Consideration requires each party of the agreement to give up something of value.
Consideration can take the form of a sum of money paid, or the promise to do something. In the supermarket example, you give up your money and the retailer gives up the groceries

Question 30

what are the consumers four basic rights

Answer 30

safe products, Accurate product information and descriptions, Full disclosure of the terms of sale and Consumer guarantees and warranties are honoured

Question 31

what is consumer guarantees

Answer 31

The Competition and Consumer Act 2010 provides consumer guarantees on certain goods and services.

Question 32

what are Consumers are guaranteed that the goods they buy

Answer 32

are of acceptable quality and are fit for purpose (suitable for that which they are being sold)
match the description, sample or demonstration model
comply with any warranty → voluntary promise made by a manufacturer or supplier about the goods.
have spare parts reasonably available.

Question 33

what are Consumers are guaranteed that the services they buy

Answer 33

fit for purpose
provided with reasonable skill, care and time.
If something goes wrong, the consumer should seek a remedy from the business, usually in the form of a refund, replacement or repair.

Question 34

what are the responsibilities of consumers

Answer 34

Consumers have numerous responsibilities as well as many rights.
These responsibilities include paying the correct amount, purchasing goods and services from ethical and legal sources, using the products in an environmentally friendly manner and accepting most of the risk when they purchase something.

Question 35

what are the organisations that provide assistance for consumers

Answer 35

State governments
Ombudsman
Federal government
Independent organisation: CHOICE
The media through programs like a current affair