"Consumer Economics" Chapter 6 - Vocab and Notes

Consumer Services

What are the risks of buying services?

After a service is used, it has little to no monetary value, while products have specific markets catering to them and have many uses.

Credence goods

A good or service whose quality consumers cannot assess before, during or even after use

The options available for automobile maintenance and repair

1. Diagnostic center

2. Independence service center

3. New automobile service center

4. Retail store service center

5. Specialty service center

Pros and cons for the diagnostic center for automobile maintenance and repair

Pros: with a predetermined fee, they provided a list of repairs and maintenance needed for a specific vehicle

Cons: Do not do the actual repairs

Pros and cons for an independent service center for automobile maintenance and repair

Pros: Privately own and operated

Cons: Inconsistent quality, do not provide warranties on their work, no waiting room or pick-up/delivery service

Pros and cons for a car dealership for automobile maintenance and repair

Pros: Most reliable option, well trained mechanics, warranted, waiting rooms, pick-up/delivery services, accept various payments

Cons: Expensive repair costs, uses sales and service record databases to mail reminders, coupons, and other incentives

Pros and cons for retail store auto service centers for automobile maintenance and repair

Pros: Small waiting areas, accept various payments

Cons: Mechanic competence is inconsistent/limited expertise, no pick-up/delivery services

Pros and cons for specialty service centers for automobile maintenance and repair

Pros: Expertise in one or two areas, highly competent but limited mechanics, waiting areas, accept various payments, fees are similar to their competition, offer “specials”

Cons: No pick-up/delivery services

Tips for mechanic shopping

1. Ask friends, the BBB, relatives, and coworkers for reliable mechanics

2. Determine specific training, practical experience, and certification of the mechanic who may be working on your specific car model

3. Ask about cost schedules; some charge by type of repair, hourly rate, or flat-rate book

4. If a repair is needed, let competent mechanics make a diagnosis based on your statement of the problem

5. If a repair is required, make sure a work order is completed

Flat-rate book

A publication listing the time a specific repair should take. Mechanics multiply that time by their hourly wage to determine the total labor cost of the repair

Tips for selecting an attorney

1. Seek recommendations from friends, relatives, etc

2. Determine competency

3. Determine costs

4. Hold a consultation to discuss fees and the attorney’s experience with your type of case

5. Research the costs

Contingency fee

A fee determined on a percentage basis; the attorney receives a predetermined portion of the amount of money awarded to the client. If the client receives no award, the attorney also receives no payment for the service. Contingency agreements ensures that the client still pays expenses and various fees.

Paralegal

A person trained in law who can legally perform specific tasks under the direction of a practicing attorney. Allowable tasks are diverse and depend upon individual state mandates

Tips when searching for child care

1. Ask about certifications, licensing with the state, or accreditations with professional organizations; provider should exceed minimum requirements

2. Get a listing of the costs for all services and potential services; part-time vs full-time service, prepayment requirements, cancellation policies, vacation credits, etc

3. Look for how many children are per adult

4. Check for monetary assistance

5. Ask about their food services for the children

6. Ask about physical activities

7. Ask if the home or facility is in full compliance with health regulations, fire codes, and other safety regulations

8. Ask about transportation services for the children

9. Ask about any other services/ancillary services

10. Get copies of policies, parents’ rights handbook, activities guide, etc

11. Ask about their discipline orientation

12. Make sure you are on the same timetable if leaving an infant

Medicaid resident

An elderly consumer who qualifies for Medicaid assistance in the assisted living facility because the person’s total assets do not exceed state minimums

Private-pay resident

An elderly consumer who does not need government assistance to help pay for assisted living

Custodial care

Room and board services but minimal assistance for personal living and health needs

Skilled nursing care

Extensive personal living and health-care services in addition to room and board

Intermediate care

Room and board services and some minimal personal living and health-care services

Three types of assisted living

1. Custodial care

2. Intermediate care

3. Skilled nursing care

Tips when searching for an assisted living facility

1. Licensing

2. Costs

3. Private-pay or medicaid availability

4. Health-care services

5. Food services

6. Exercise and rehabilitation services

7. Activities program

8. Safety

9. Transportation availability

10. Ancillary/facility unique services

11. Get copies of policies and related materials

Financial planner/ Asset manager

A professional whose main objective is to manage clients’ assets

Financial counselor

A professional whose main function is to attempt to reduce clients’ debt

Portfolio

All the securities and related assets an investor owns

Different types of financial planners

• Commission-only

• Fee-and-commission

• Fee-only

Commission-only financial planner

A professional who offers free services to clients and is paid through commissions earned by selling the recommended investments

Fee-and-commission financial planner

Charges the client a fee and also pays commissions on the investments recommended

Fee-only financial planner

A professional who charges the client a fee for recommending an investment plan

Tips for selecting a financial planner

1. Credentials

2. Training and experience

3. Continuing education

4. Total costs of services provided

5. Conflicts of interest (receives commissions from any source)

6. Financial plan

7. Interaction with the planner

Ophthalmologist

A physician who specializes in diagnosis and treating eye disease; prescribes drugs, performs exams and eye surgery; and also may provide eyeglasses/contacts

Optometrist

A medical professional who has a doctor of optometry degree in eye care

Optician

A vision specialist who takes measurements and produces vision aids based on prescriptions written by ophthalmologists or optometrists