Popular in Consumers in the Marketplace
Popular in Department
verified elite notetaker
This 5 page Study Guide was uploaded by Taylor Wall on Sunday September 25, 2016. The Study Guide belongs to CA 1341 at Texas State University taught by Judy L Allen in Fall 2016. Since its upload, it has received 5 views.
Reviews for Study guide
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 09/25/16
Test I REVIEW—Part A CA 1341 Fall 2016 ECONOMIC SYSTEMS What is the basic purpose of any economic system? An economic system is a system of production and exchange of goods and services as well as allocation of resources in a society. What are the three questions any economic system must answer? What to produce How to produce it What consumers get it What three entities that can answer the above questions? In the United States, who answers the three questions? What is the difference between an economic system that is classified as a “Market System” vs. an economic system classified as “Central Planning”? How is the U.S. classified? Market planning producers, buyers and consumers who drive economic activity in the market. (U.S.) Central Planning decisions on what to produce, how to produce it, and who to produce it for are decided by the government: usually associated with a Communist society. What does Consumer Sovereignty mean? The desires and needs of consumers control the output of producers. What are the 4 possible categories that businesses (in the U.S.) could be classified in? What are the characteristics of each category (how do they differ)? Does competition differ depending on the category (how)? How are U.S. businesses/producers distributed among the categories? Be able to complete/explain the following chart: Market Type Number of Type of Entry Price producers Product Condition Comparison Oligopoly 24 Similar Difficult but 2 products not impossible because market is dominated Pure Monopoly 1 Unique Impossible 1 products from 1 producer Monopolistic/ Many Similar Easy 3 Competitive products like fast food Pure Many ++ Standard Very easy 4 Competition products How does competition affect the price of a product? The more competition for one type of product, the more competitive the prices must be. (all within same range) No one will pay $20 for one brand of toilet paper when every other brand of toilet paper is around $12. CONSUMER MOVEMENT For each of the 3 major Consumer Eras: Era 1: 18801917 Era 2:19291940 Era 3: late 1950’s1980 o What were the major safety issues? ERA 1: food and drug industry, protecting food supply and labeling food, The Jungle was written by Upton Sinclair discussing regulations on food; Meat inspection Act in 1906. ERA 2: Elixir Sulfanilamide (drug problem from cough medicine), cosmetics scandal (Cosmetics Act) ERA 3: Cranberry scare, Thalidomide (morning sickness pill that caused disabilities in babies) o Identify the President and/or Consumer Advocates and/or the media that influenced the era ERA 1: DR. Harvey Wiley (father of consumerism, first person to work for consumer safety). Upton Sinclair (wrote The Jungle first book on food regulations) ERA 2: F.J. Schlink (One Million Guinea Pigs; testing food and products on consumers without their knowledge). Colton Warne (cofounder of Consumers Union). President Roosevelt. ERA 3: Vance Packard (The Hidden Persuaders; first book that took a look at marketing; influence of advertising on consumers). Ralph Nader (Unsafe at any Speed; book about automobile safety). Senators Douglas and Hart. Presidents Kennedy, Johnson, Ford and Carter. o Identify consumer legislation passed during era ERA 1: 1906 Meat Inspection Act (protection during processing). 1906 Food and Drug Act (protection during transportation and sale of food/drugs) ERA 2: 1938 Food, Drug and Cosmetic Act ERA 3: Magnuson/Moss Warranty Law (2 senators made companies stay true to their warranties on their products). Airline bumping rules; Fair credit reporting act; Equal Credit Opportunity Act. o How did the legislation that was passed change emphasis from Era 1 to Era 3 o o Know what caused the end to each era ERA 1: WW1 ended era followed by prosperity in 1920’s ERA 2: stock market crash and WW2 ERA 3: Defeat of Consumer Protection Agency; US becoming more conservative; Election of President Reagan. Are all the elements required for an Era #4 Consumer Movement available in the U.S. now (2016). If no, what is missing? Possibly, but we have too weak of an economy and significant safety problems. What were the first four Consumer Rights? Who identified/outlined them? Be able to identify/explain the rights. President Kennedy o Right to be safe o Right to be informed o Right to choose o Right to be heard What were the additional Consumer Rights identified in addition to the first four. Be able to explain. President Johnson o Right to decent environment President Ford o Right to consumer education Consumer Representatives o Right to redress (rights for a consumer to exchange a product if they need to) Why are Consumer Responsibilities important? Be able to discuss/explain responsibilities discussed in text and in class. What problems might we encounter while trying to fulfill them? To be aware of role and function in economy To perform role effectively o To be an alert, informed, responsible consumer o To exercise independence of judgment, action and manufacture To avoid wasting resources To avoid exploitation of workers To be honest in dealings To protest when appropriate o To report wrongs incurred in consumer dealings To communicate with producers and businesses To accept consequences of consumer decisions To report defective goods to both the seller and manufacturer ADVERTISING What is the purpose of advertising? To provide new info about products Who ultimately pays for advertising? How? Consumers by buying the products we see in advertisements The top 10 national advertisers primarily could be categorized as what type of business (from Economic Systems discussion) Oligopolies What are the three categories/classifications of advertisements? Be able to explain each. Which type of advertisements do we see most frequently? Informative 3 most common type of ad nd Comparative 2 most common type of ad Defensive or Competitive most common type of ad Do advertisements stimulate competition or reduce competition (national vs. local level)? National reduce competition Local stimulate competition Discuss the relationship of advertisers and the “content” of the media in which they are advertising. Be able to name some “types” of deceptive advertising and be able to explain why they may be deceptive. Bait and Switch getting consumers to come into the store to buy one thing and then revealing that the original product isn’t what they expected, in turn showing them a better product. Misleading statements insinuating something about a product that isn’t necessarily true Puffery sugar coating something; red bull gives you wings What is “bait and switch” advertising? Legal or illegal? getting consumers to come into the store to buy one thing and then revealing that the original product isn’t what they expected, in turn showing them a better product. Legal What is “puffery”? Legal or illegal? Using hyperbole or exaggeration to advertise; legal Which federal agency has control over advertising? What power do they have? Are ads reviewed/checked prior to being released? Do they control the price of the advertisings? Federal Trade Commission Yes they review ads before they are released Depending on the channel, length of ad and timing; makes price higher What is corrective advertising? How successful has it been? Admitting mistakes; pretty successful What are celebrity endorsements/testimonials? Are they effective? What rules apply to celebrity endorsements/testimonials? Yes they are successful What is the definition of a “deceptive ad”? Using false or misleading information to persuade a customer; most government agencies have regulations about using inherently false information versus just making an honest mistake; most deceptive ads claim to add health benefits from using a product. What is the purpose of “marketing research” and “motivational research”? How are they similar and how are they different? Marketing research asks customers questions Motivational research does research on things that appeal to something within consumers; emotional type appeals. What is subliminal advertising? Using an underlying message to persuade someone to buy something.
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'