Test 1 Flashcards
What percentage of the Canadian GDP is taken up by private consumption?
58%
Spending is a leisure activity that serves to show my status. What type of consumption is this?
Conspicuous consumption.
Why do we need to make choices when spending?
Because our desires are unlimited, but our resources are not. We must choose between spending for desires or spending for necessities.
How can we prioritize our needs and desires?
1- Necessary things to satisfy our basic needs such as food, clothing, rent, etc.
2- Important but non-essential things such as a bicycle or bus pass, school, etc.
3- Non-important and non-essential things such as popcorn when going to the movies, music, etc.
What are the 5 components (from bottom to top) of Maslow’s hierarchy of needs?
- Physiological (eating, drinking, sleeping, breathing)
- Safety (body, job, health, house)
- Love and belonging (friendship, family, intimacy)
- Self-esteem, confidence, achievement
- Self-Actualization
What is planned obsolescence?
When to increase profit, a business reduces the life-span of its products. Changing a design (fashion), making things that break, changing the technology.
What are the 5 forms of responsible consumption?
1- Local agriculture 2- Organic agriculture 3- Fair trade 4- Purchase with cooperatives 5- Voluntary simplicity
What is fair trade?
Fair trade is a guarantee that a product respects the some basic principles. These are creating opportunities for the economically disadvantaged, transparency, fair payment, no child or forced labor, good working conditions, non discrimination, and respect for the environment.
What are cooperatives?
Companies that have as goal to help their members and invest in society. Their sole objective is not to make profit.
What are 2 alternative methods of budgeting?
- Pay yourself first (transfer the amount you need)
2. Envelope method.
What is net worth?
Assets-Liabilities.
What is debt-to-asset ratio?
Total liabilities/total assets.
What is the SMART acronym for goals?
Specific, measurable, actionable, realistic, timlely.
What are ways to reduce spendings?
- Make lunches at home instead of eating out.
- Make coffee at home.
- Sleep on big purchases instead or buying impulsively.
- Make shopping lists and stick to them.
What is disposable income?
Income after taxes and deductions.
Do liquid cash and bank account savings fit in the budget or personal balance sheet?
Both! Liquid cash and savings count as “left over from prior months” in the budget.
What can be done to prevent goods delivered at home arriving late?
A cancellation clause can be asked, so that if the date is not respected, the order can be cancelled and you can get a refund. The agreed upon date should be written on the back of the bill.
Can recovering agencies threaten to sue you or tell you that you’ll go to jail?
No, they hold no legal power. The company or individual who hires the recovering agency can sue you though.
Are businesses required to have a refund policy?
No.
Is there a minimum deposit for buying goods?
No, you should always negotiate the smallest possible deposit in case the company goes bankrupt.
How do cancellation fees on cellphone plans work?
The cancellation fees depend on the rebate given on the cellphone like so: Discount-(Discount x number of months elapsed/total months). If half the contract has elapsed, then the cancellation fee is half of the discount on the phone.
How do cancellation fees for internet services work?
The cancellation fee is either 10% of the remaining balance of the contract or 50$, whichever is lower.
What are the three types of warranties and what do they do?
- Basic Warranties: manufacturer’s warranty. Free, (ex. 1 year on most electronics).
- Extended warranties: cost money but extends the coverage or coverage time.
- Legal warranty: states that a good should work for its intended use and for a reasonable amount of time. Free.
What information are merchants obligated to provide before selling an additional warranty?
Let you know about the legal warranty. Give you a printed document about the legal warranty. Let you know of the manufacturer’s warranty.
What are some restrictions for advertisements?
It is forbidden to:
- Advertise a price lower than the real price.
- Advertise a good of which insufficient quantity is available without mentioning so.
- Present data falsely presented as scientific.
- Advertise for kids
Appliance repairmen have to give estimations for repairs estimated to cost more than __$
50$.
How long are appliance repairs covered under warranty?
3 months.
For car repairs, garages have to give a written estimation for repairs exceeding __$
100$. Unless repair is covered by warranty.
How long is a car repair covered under warranty?
3 months or 5000km, whichever comes first.
How long are motorcycle repairs covered under warranty?
1 month with unlimited km.
The price accuracy policy is non-applicable for which products?
Tobacco, alcohol, cow milk and prescription drugs.
