res mgt final summary

consumer sovereignty (dollar vote)

idea that in a market economy, consumers are in charge. what consumers but and dont buy alters the economy.

values

life, work, cultural, social, and demographic

decision making process

specify, search, sift, select, study

opportunity cost

value of the alternative you give up when you make a choice to buy/not buy something.

law of scarcity

how much to produce, how to distribute, and how to divide among the people

law of supply

producers offer more of a product for sale at higher price.

law of demand

consumers demand more of a product at a lower price.

gross domestic product

current value of all goods and services produced in a country in a year that measures economic strength through unemployment rate, inflation, and personal income

consumer price index

measures monthly changes in the price of a basket of goods and services that people regularly buy to measure inflation.

traditional economy

economic decisions are based on customs and beliefs. ancestors determine what is made and village people purchase products.

command economy

all economic decisions are made by the government and they determine what is made and who receives it.

market economy

economic decisions guided by consumers and businesses decide what is made based on what consumers buy.

mixed economy

mix of market and command where businesses decide what to produce but governments place restrictions on them.

inflation

increase in economy’s average prices

recession

period of general decline in the nation’s economy.

monetary policy

used to stabilize the economy by reducing interest rates in a recession and increasing interest rates in an inflation

fiscal policy

used to stabilize the economy by reducing taxes or increase the government’s own spending in a recession and vice versa for an inflation.

antitrust law

prevents or controls trusts or other monopolies with the intention of promoting competition in business.

public safety law

used for the welfare and protection of the general public.

well-being law

for the welfare and protection of business, communities, and general public.

free enterprise

economic system in which a private business operates in competition and largely free of state control.

discount rate

annual interest rate set by federal reserve for lending to other banks.

defensive advertising

tries to convince you that its product is the best choice after attacks from comparative ads and claims made by other companies. (ex: political ads)

informative advertising

designed to influence you to buy a product by educating you about the products benefits. (ex: car ads)

full warranty

everything is covered, including parts, labor, repairs, and replacements for the set length of the warranty.

limited warranty

covers some things such as it may only be repaired or it may only cover repairs.

express warranty

written warranties

implied warranty

assumed promise

extended warranty

offer more coverage and/or time but costs extra (aka service contract, service agreement, and maintenance agreement)

consumer product safety commission

protects from risk of injury from consumer products used in and around the home, recreation areas, and school. it also sets safety standard for consumer products and promotes research into causes of injury and death.

food and drug administration

protects the public from impure and unsafe foods, drugs, cosmetics, and medical devices and tests products for safety and effectiveness. also determines whether drugs can be sold in the US and whether they require a prescription or over the counter.

environmental protection agency

enforced laws that protect the environment and establishes rules for disposing hazardous waste. also sets standards for air and water quality and monitors business for compliance.

generally recognized as safe

determines which food and food additives need premarket review and approval by the FDA

federal trade commission

promotes free and fair competition and regulated interstate competition. also sets truth in advertising and labeling standards and prosecutes unfair and deceptive business practices.

united states department of agriculture

presided over meat, fish, poultry, and dairy products (animal food products) and inspects food products and facilities. sets safety and sanitation standards and inspects certain foods for safety and wholesomeness.

better banks bureau

nonprofit business sponsored agency with local offices dedicated to educating consumers, helping to resolve disputes, and promoting honest business practices.

securities and exchange commission

protects investors from fraud and bad business practices as well as regulating selling and buying of securities and investments

who outlined the original consumer bill of rights

JFK

how many original rights were there in the original consumer bill of rights

4

what were the original rights in the consumer bill of rights

1. safety - protected from dangerous products

2. representation - consumer interests represented in products

3. information - informed on all necessary information regarding a product through labeling

4. choice - choose among a variety of products

what are the new 4 rights in the consumer bill of rights?

1. healthy environment - work in a safe environment

2. education - acquire skills and knowledge necessary to make informed decisions

3. redress - receive compensation misrepresented or unsatisfactory products

4. basic needs - necessary things to survive must be accessible

standard of identity

mandatory requirements that determine what a food must contain for it to be marketed under a certain name

complaint system stes

1. definite objective of complaint in writing

2. complain as soon as possible

3. complain to the right person

4. be specific and factual

5. be respectful and reasonable

6. suggest a solution

7. be professional

8. be persistent and willing to compromise

order of complaining

1. local business

2. manufacturer

3. self regulatory organizations

4. consumer action agencies

5. small claims/civil court

w4

tells your employer how much to withhold from your paycheck

w2

includes information about the total amount you were paid during the previous year and the federal, state, and social security taxes withheld.

internal revenue service

federal agency that collects taxes

social security

provides income when earnings are reduced or stopped because of death, disability, or retirement

tax return

document for the government to show your tax obligations

tax refund

money you receive from the government for overpaying your taxes

1099-int

interest earned from bank

1099-div

dividends earned (share of company profits)

1040 requirements

1. all tax information such as w2s, 1099s, and records of income and deductions.

2. social security number and that of your dependents

3. your income and employment status determine which schedule you file

excise tax

used by the government for the sale and transfer of taboo things like cigarettes, alcohol, cell phones, air travel , gas, firearms

gift tax

federal government uses to tax things more expensive then $15,000

social security tax rate

6.2%

medicare tax rate

1.45%

state of illinois income tax

4.95%

tax audits

examination by irs over your tax return to make sure you aren’t committing tax fraud

standard deduction

amount you may subtract from your adjusted gross that is not based on how many dependents you have

itemized deduction

eligible expenses that individual tax payers can claim on federal income tax returns to decrease taxable income

net worth

assests - liabilities

federal deposit insurance corporation

insures deposits in most banks up to a maximum of $250,000/depositor/bank

national credit union administration

insures credit unions up to $250,000/depositor/bank

savings association insurance fund

insures saving and loans banks up to $250,000/depositor/bank

money market

allows you to write a limited number of checks

negotiable order of withdraw

bank or credit union has the right to require at least a seven day written notice of withdrawal

cost per check

amount you pay to the bank per check to use a check

travelers check

checks you pay for in advance that are used when you don’t want to carry a lot of cash

certified check

personal check that has been stamped and checked by a bank officer to insure you have enough money in your account

cashiers check

bank check drawn on the banks funds and signed by a bank official which is used to pay someone you doj’t know well

money order

purchased and written to payee and is used when you dont have a checking account or when a personal check is not accepted

credit union

non for profit organizations with a board council used to appeal to all types of clients

commercial bank

for profit owned by leaders determined by stockholders votes weighted by amount invested

savings and loans bank

specializes in real estate financing and originally has many loans