Economics: Chapter 3

1
Economics Chapter 3

• Your role as a Consumer

2
Section 1

• Disposable Income, Your income after taxes have
  been paid.
• Discretionary Income, After necessities are
  bought the income you have for extras.
• Consumer, any person or group that buys or uses
  goods and services to satisfy personal wants.

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Decision Making as a Consumer

• 1. Scarce resources, after you decide to make a
  purchase time and money are two scarce resources
  you have.
• 2. Opportunity Cost, what is the cost of the next
  best alternative.
• 3. Rational choice, the alternative that has the
  greatest value.

4
Section 2

• The three basic buying principles
• Gathering information, using your time wisely.
• Using advertising wisely
• Competitive advertising, convince the consumer
  your product is better. Take away customers.
• Informative advertising