Consumer And Financial Decisions Flashcards
(84 cards)
1
Q
Define a consumer.
A
A consumer is someone who purchases goods and services to satisfy their needs and wants.
2
Q
Define goods.
A
Goods are tangible items.
3
Q
Define services.
A
Services are things that are done for you in return for money.
4
Q
Define needs.
A
Needs are things necessary for your survival such as food and water.
5
Q
Define wants.
A
Wants are things unnecessary for survival, such as phones and makeup
6
Q
Define money.
A
Money is any token with an agreed value that people accept as payment in exchange for a good or service.
7
Q
Define price.
A
Price is the amount of money a consumer is prepared to offer in exchange for a good or service.
8
Q
Define resource.
A
A resource is anything that can be used in the production of a good or service.
9
Q
Define scarcity.
A
Scarcity is a lack of a resource needed to satisfy consumer wants and needs.
10
Q
What is the difference between durable and non-durable goods?
A
A durable good is one that can be used many times, such as a car or TV, while non-durable goods can only be used once, such as a sandwich or tissue.
11
Q
Define an opportunity cost.
A
An opportunity cost is what an individual gives up in order to satisfy a need or want.
12
Q
Four types of resources:
A
- Land
- Labour
- Capital
- Enterprise
13
Q
What is land?
A
Land is a naturally-occuring resource, such as forest.
14
Q
What is labour?
A
Labour is the physical and mental effort of working people.
15
Q
What is capital?
A
Capital resources are goods used to make other goods.
16
Q
What is enterprise?
A
Enterprise combines land, labour and capital resources to earn a profit.
17
Q
Factors affecting consumer decisions:
A
- Customer service
- Price
- Convenience
- Marketing and advertising
- Gender
- Age
- Disposable income
- Environmental considerations
- Social media
- Cultural factors
18
Q
Define income.
A
Income is money received on a regular basis from work, property, business, investment or welfare.
19
Q
Why are financial plans so important?
A
Financial plans are important for ensuring they have enough money to take care of their needs and wants.
20
Q
Define comparison shopping.
A
Comparison shopping is shopping around to obtain the best deal.
21
Q
8 rules for comparison shopping:
A
- Think carefully about what you want
- Shop around for the best deal
- Investigate the product’s features
- Decide beforehand how you want to pay
- Check the refund and returns policy
- Do not sign a blank paper or anything you don’t understand
- Compare after-sales service and guarantees
- Keep all receipts and invoices.
22
Q
Define impulse buying.
A
Impulse buying refers to buying items that a person was not planning on purchasing.
23
Q
What is a generic product?
A
A generic product is an unbranded item without a specific company’s label, offered at a lower cost because it is an alternative.
24
Q
Sources for comparison shopping:
A
- Online retailers (e.g Amazon and eBay)
- Brick-and-mortar stores (e.g grocery shop)
- Price comparison websites (e.g Google shopping)
- Coupon and discount websites (e.g honey.com)
- Social media groups and forums (e.g Reddit or TikTok Business)
25
Advantages of comparison shopping:
- Cost savings
- Evaluation of product features and quality
- Variety of options
26
Strategies to avoid impulse buying:
- Prepare a shopping list
- Compare prices at different stores
- Ask yourself if you really need the item
27
What is bad debt?
- Lifestyle assets
- Burrowing to feed your ego
- Burrowing for holidays, treats or luxury items
28
What is good debt?
- Burrowing to invest
- Tax management
- Items you need and can't wait for
29
Factors to consider for affordability:
* Income
* Debt load
* Financial goals
30
Factors that may change affordability:
- Job loss or income reduction
- Unexpected expenses
- Interest rate changes
- Life events
- Health issues
31
Supply chain:
- Raw materials
- Supplier
- Manufacturer
- Distributer
- Retailer
32
What is mail order?
Mail order is a system of shopping in which the consumer completes and posts an order form, usulaly from a magazine and catalogue, and receieves products through the mail.
33
Advanatges of mail order:
- Greater range of available products compared to retail stores
- Convenient for disabled consumers
34
Disadvantages of mail order:
- Losing the money if the business does not send the product
- Products appearing different from the catalogue
- Experiencing problems tracing a business if a refund ir required
35
What is online shopping?
Online shopping is when a consumer buys goods and services over the internet.
36
Advantages of online shopping:
- Convenient comparison shopping
- Mobile app accessibility
37
Disadvantages of online shopping:
- Delivery fees
- Time-consuming returns
- Security concerns with card details
38
What are retail outlets?
Retail outlets are when buyers and sellers come together in a physical store or marketplace and products are exchanged for money.
39
Types of retail stores:
- Convenience stores
- Specialty sotres
- Discount variety stores
- Factory outlets
- Department stores
- Supermarkets
40
Common payment methods:
- Cash
- Credit cards
- Debit cards
- Online bank transfers
- Mobile banking apps
41
What is credit hangover?
Credit hangover is the regret experienced after borrowing too much, leading to difficulty in managing debt.
42
Pros of a cashless society:
- Decrease in money laundering
- Easier currency exchange
- Less time handling and storing money
43
Cons of a cashless society:
- Potential data breach may expose personal info
- Hacking risks
- Technological issues
- Increased temptation to overspend
44
Two examples of protective legislation:
- Competition and Consumer Act 2010
- Fair Trading Act 1987 (NSW)
45
What does the Competition and Consumer Act 2010 enforce?
Under this Act, an unconscionable act by a seller is any practice that is unreasonable, such as scams and rip-offs.
46
Common scams and rip-offs:
- False advertising
- Referral selling
- Unsollicited goods
- Special prizes and offers
- Pyramid schemes
47
What is bait and switch advertising?
Bait and switch advertising is when a few products are advertised at reduced prices to attract customers who are instead directed to higher-priced items.
48
What is false advertising?
False advertising is when advertisements claim that a product has a specific quality when it does not.
49
What is referral selling?
Referral selling is when the consumer is offered a 'special deal' if they buy the product and then supplies the names of potential customers to the trader. The 'special deal' is usually a discount which is not always enforced.
50
What are unsollicited goods?
This practice involves sending unordered goods through the mail and them demanding payment for them. The Competition and Consumer act 2010 prevents you from having to pay for these goods.
51
What are pyramid schemes?
Pyramid schemes are when you are required to pay a joining fee with the opportunity of earning quick and easy money as you recruit new members. However, most participants lose money.
52
What does the department of Fair Trading enforce?
- Consumer complaint resolution
- Business regulation
53
What is a contract?
A contract is a legally enforcable agreement between two ro more persons or parties.
54
What makes a contract legally binding?
- Proposal
- Acceptance
- Consideration (each party gives up something of value)
55
What are the four basic rights of consumers?
1. Safe products
2. Accurate product information and descriptions
3. Full disclosure of the terms of sale
4. Honoured consumer guarantees and warranties
56
What is the purpose of the Australian Consumer Law 2011?
The Act's main purpose is to protect consumers against:
- False advertising
- unconscionable conduct
- Unfair trade practices
57
Who enforces the Australian Competition and Consumer Act 2010?
- Australian Competition and Consumer Commission (ACCC)
- Each state and territory's consumer agency
- Australian Securities and Investments Commission (ASIC)
58
Consumer guarantees for goods:
Consumers are guaranteed that the goods they buy:
- Are of acceptable quality
- Are fit for purpose
- Match the description
- Comply with any express warranty
- Are legally owned by the seller without any charges
- Have spare parts reasonably available
59
Consumer guarantees for services:
Consumers are guaranteed that the services they buy:
- Are fit for purpose
- Provided with reasonable skill and care
- Provided within a reasonable time
60
Consumer remedies:
Refund, replacement or repair
61
Consumer responsibilities:
- Paying the correct amount
- Purchasing goods and services from legal and ethical sources
- Using the products in an environmentally friendly manner
- Accepting most of the risk when they purchase something
62
Organisations that provide assistance for consumers:
- State government
- Ombudsmen
- Federal government
- CHOICE
63
What does the state government do to assist consumers?
- Assists consumers resolve their complaints
- Checks that products meet Australian safety standards
- Warns the community about scams and rip-offs
64
What are ombudsmen?
Ombudsmen are agents who have the task of investigating and reporting complaints.
65
How does the federal government assist consumers?
- Australian Securities and Investments Commission (ASIC)
- Australian Competition and Consumer Act (ACCC)
66
What is CHOICE?
CHOICE is Australia's largest consumer watchdog organisation. It deals with consumer enquiries and investigates consumer complaints.
67
Points to remember when making a complaint:
* If using the phone, always get the name of the person you are talking to
* Keep a written record of all conversations and copies of letters and emails
* File and receipts for proof of purchase
* If you leave the good with the trader, request a receipt
* Check your guarantee to determine whether is covers the problem you are trying to solve.
68
Personal consequences of poor management of finances:
* Inability to maintain lifestyle choices
* Feelings of self-doubt and regret
* Stress at home, school and work
69
Social consequences of poor management of finances:
* Relationship tensions or breakdown
* Not being able to afford the cost of social activites
* inability to holiday, travel or invest with others
70
Legal consequences of poor management of finances:
* Garnishee of your wages or bank accounts
* Writ of execution
* Bankruptancy
71
Ways to be financially responsible:
* Creating a personal budget
* Rolling all debts into one loan
* Regularly depositing in a savings account
72
3 main types of financial plans:
* Short-term plans (1-3 year goals)
* Medium-term plans (4-6 year goals)
* long-term plans (7+ year goals)
73
What is the age that Australians can access aged pensions?
Australians can access aged pensions at 67 years.
74
Strategies for a successful retirement:
* Investing in real estate
* Investing in Bitcoin, shares or managed funds
* Superannuation
75
What is superannuation?
Superannuation is a compulsory savings account with money set aside and saved while working.
76
Strategies for effective superannuation:
* Paying additional money into your account for tax benefits
* Have one Super account to minimise fees and maximise returns
77
Steps for a budget:
1. Calculate your total income
2. Record your expenses
3. Total your expenses
4. Compare your total income with your total expenditure
5. Assess your financial position
78
Where can Australian access loans?
* Banks
* Credit unions
* Building societies
* Finance companies
79
What is a fixed interest rate?
A fixed interest rate stays the same throughout the term of the loan.
79
What are loan repayment based on?
* Sum burrowed
* Term of the loan
* Whether the interest rate is fixed or viariable
80
What is a variable rate?
Variable rates change over the period of the loan.
81
What choices do Australians have when applying for a hardship variation?
* Extending the loan period and making smaller repayments
* Postponing repayments for an agreed period
* Selling assets and only paying interest on the loan
82
Support for financial difficulties:
* Financial advisors
* Customer support in banks
* Centrelink
83
What is barter?
Barter is the outdated method of swapping or exchanging one good for another.
