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Consumer Economics

Consumer Economics

Author(s): Wendy Reiboldt

Edition: 19

Copyright: 2024

Edition: 19

Copyright: 2024

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New Nineteenth Edition Now Available!

The nineteenth edition of Consumer Economics leads students through the social, economic, and political forces that shape consumer demand and seller supply. The book provides students with a strong understanding about how the economy operates, the importance of political influences, and how the marketplace works to both serve and deceive consumers. Topics covered include consumer behavior, fraud, technology and social media, advertising, asset management, consumer services, and government efforts to assist consumers. The book helps students become mature and informed consumers by providing practical tips and guidelines on day-to-day choices and decisions for optimal interaction in the marketplace.

This edition has been updated to reflect changing times while maintaining its focus on long term trends and issues. It includes new and updated consumer websites, legislation, and case studies reflecting current marketplace conditions.  Content specific to college students on budgets and fraud provide important and timely information to students. New to this edition is a “Connected” box which allows students to “plug in” to influencers, apps, online content, and government programs with relatable and relevant content.

Wendy Reiboldt's Consumer Economics includes:

  • Web sites for over 200 important consumer sites, allows students to explore a variety of resources regarding consumer information, services, bargains and assistance.
  • Key Terms, Chapter Goals, and Learning Objectives begin each chapter to help students evaluate their comprehension of the content.
  • Boldfaced Key Terms, marginal definitions, and a book-end Glossary offer convenient reference points.
  • FYI, Tips, and Q & A boxes are featured in the margins to deliver brief capsules of information for consideration and discussion.
  • Case Studies and narratives on relevant topics, provide current, thought-provoking questions and provide opportunity for additional exploration.
  • The feature “There’s a law for that…” covers key pieces of consumer-friendly legislation.
  • Chapter Summaries, Review and Discussion Questions, and Exploring Personal Values sections encourage students to dive deeper into course content.
  • Tear out worksheets allow students to obtain instructor feedback (in the paper textbook version!).
  • Companion website provides additional resources, activities, and opportunities for further exploration into subject matter.

Preface
A Note to Readers

PART ONE
Who Are You?

THE CONSUMER IN AMERICA
THE CONSUMER IN A FREE SOCIETY
Introduction
We Are All Consumers
How the Economy Operates
Who Owes What?
Consumers or Producers?
Who Decides What Shall Be Produced?
Consumer Sovereignty
The Classical Economists’ Model
The Institutional Framework
Satisfying Consumer Wants 
What Makes Our Economy Go?
Significant Differences Among Consumers
Collective Consumption
Do Consumers Really Know What They Want?
Can Consumers Determine Quality?
Can Consumers Be Sure of Safety?
Can Consumers Check the Quantity?
Can Consumers Detect Fraud?
Can Consumers Cope with Pricing Practices?
Does Competition Control Prices?
Does Market Price Measure Subjective Value?
The Consumer Movement: A Brief History
The First Era
The Second Era
The Third Era
The Fourth Era: Are We In One?
The Dual Role of Consumers
Consumer Rights
Consumer Responsibilities
Consumer Democracy
Consumers and Social Media
International Consumer Issues
SUMMARY
THERE’S A LAW FOR THAT: TRUTH-IN-LENDING (TILA)
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

2  THE COMPLEXITY OF CONSUMER DEMAND AND SELLER SUPPLY
The Search for Happiness
Do Consumer Wants Have Any Limit?
Can All Wants Be Satisfied?
Four Principles of Consumption
Needs and Wants
Classifying Consumer Goods and Services
The Complexity of Wants
Physiological Needs and Wants
Psychological Wants
CASE STUDY: THE COMPLEXITY OF WANTS
Social Wants
The Role of Groups
Characteristics of Groups
Group Influence
Other Forces Influencing Wants
Environmental Influences
Socioeconomic Influences
Political and Governmental Influences
How Consumer Demand and Seller Supply Come Together
Consumer Demand 45 Seller Supply
THERE OUGHTA BE A LAW: FAIR CREDIT BILLING ACT (FCBA)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

3 CONSUMERS: LEADING AND FOLLOWING
The Family as a Consuming and Producing Unit
Standards and Levels of Living
Family Structure
Who Guides Consumers in the Market?
Consumption Patterns of Minors
Who Guides the Adults?
How Much Guidance?
Putting It All Together
CASE STUDY: ECONOMIC MATURITY  (OR LACK THEREOF)
The Profit-and-Loss Statement:  A Guide to Sellers
Criticisms of the Profit System
Profit over Consumer Welfare
Manipulation of Consumer Demand
Exploitation of Consumers
Does the Economy Produce What Consumers Want?
Demand First or Supply First?
The Economy Produces Enough and More
THERE’S A LAW FOR THAT: THE FAIR PACKAGING AND  LABELING ACT AND RELATED LEGISLATION (FPLA)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

4  CONSUMER FREEDOMS AND RESTRICTIONS
The Concept of Economic Freedom
Wealth, Nealth, and Illth
Conditions Necessary for Freedom of Choice
Free Entry
Full Information
Restrictions on Freedom of Choice
Natural Restrictions
Economic Restrictions
CASE STUDY: BAD CREDIT, NO JOB
Governmental Restrictions
Social Restrictions
Physical and Self-Imposed Restrictions
Conditions Promoting Freedom of Choice
Political Freedom
THERE’S A LAW FOR THAT: EQUAL CREDIT  OPPORTUNITY ACT (ECOA)
Economic Freedom in a Mixed Economy
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

PART TWO Going to Market
THE CONSUMER AND THE MARKETPLACE

5 FRAUD
What Is Fraud?
Deception, Fraud, and “Rip-Offs”
Antitrust Laws
Areas of Fraud
Financial Fraud
Health and Beauty Frauds
Medical and Surgical Frauds
Fraud in Buying and Selling Automobiles
Automobile Repair Swindlers
Counterfeited Products
Education Frauds
Employment Frauds
CASE STUDY: COLLEGE ENTRANCE SCANDAL
Charity and Religious Frauds
Defrauding College Students and Veterans Entering College
Defrauding Older Adults
Defrauding Persons with Low Income
White-Collar Fraud
How Frauds Are Perpetrated
Internet Fraud
Mail Fraud
Telemarketing Schemes
The Persistence of Fraud
Gullible Consumers and Greedy Sellers
Impotent Laws and Poor Enforcement
THERE’S A LAW FOR THAT: THE ELDER ABUSE  PREVENTION AND PROSECUTION ACT (EAPPA)
Are Consumers Helpless?
Fraudulent Buyers
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

6 CONSUMER SERVICES
Automobile Mechanic Services
Attorney Services
Child Care Services
Assisted Living Services
Financial Planning Services
Health Care Services
Pharmacists
Dentists
Vision Care Specialists
CASE STUDY: ELECTRONIC CIGARETTES BACKFIRE
THERE’S A LAW FOR THAT: THE EYEGLASS RULE
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

7 CUSTOMS AND CONSUMPTION
Meaning and Origin of Customs
Why Do Customs Continue?
What Causes Customs to Change?
Ceremonial Customs
Funerary Customs
Choices for Consumers
Marriage Customs
Religious Customs
Other Ceremonial Celebrations
The Phenomenon of Gift Giving
Consumption
Competitive Consumption
CASE STUDY: KEEPING UP WITH “THE JONESES”
Consumer Wants
THERE’S A LAW FOR THAT: THE FTC FUNERAL RULE 136 SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

8  ADVERTISING, MARKETING, AND PRICING
Advertising Around the Clock
Advertising and Marketing Defined
Advertising Expenditures: How Much and Where
Does Advertising Pay?
Benefits of Advertising
Informational Ads
Ads Announcing New Products and Services
New Uses for Known Products
Advertising Prices
Stimulating Competition
Mass Production, Per-Unit Costs, and Pricing
Something for Nothing?
Online Shopping
Free Ads for Public Service
Criticisms of Advertising
Deception in Advertising
Promoting Illth and Nealth
Promoting Dissatisfaction and Fear
Missing the Mark
Misuse of Science and Language
Encouraging Spending
Questionable Testimonials
Concentration of Companies
CASE STUDY: THE PALESSI EXPERIMENT
Who Oversees Advertising?
Better Business Bureaus
Federal Government Control of Advertising
What Consumers Can Do
The Marketing Process
What Is a Market?
Types of Market Situations
The Price System
Traditional Price Theory
Does Price Measure Value?
The One-Price System
Retail Pricing
Pricing Strategies
Pricing: A Science or an Art?
SUMMARY
THERE’S A LAW FOR THAT: MAIL, INTERNET OR TELEPHONEORDER MERCHANDISE RULE (ALSO KNOWN AS THE “30-DAY RULE”)
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

9 ENERGY AND THE ENVIRONMENT
History of Concern with the Environment and Energy
Energy, Fuel, Transportation
CASE STUDY: AUTOMATED DRIVING GONE WRONG?
Environmental Challenges
Conservation and Energy-Saving Measures
Automobiles
Housing
Recycling
Consumer Tips
THERE’S A LAW FOR THAT: CLEAN AIR ACTS
Environmental Groups
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

PART THREE Money Matters
FINANCIAL ISSUES FACING CONSUMERS

10 BUDGETING AND SPENDING
Wise Money Management
Consumer Life Cycle
Spending According to a Plan
Benefits of a Budget
CASE STUDY: COLLEGE STUDENT LOAN  DEBT….RELIEF?
Why Don’t All Families and Individuals Budget?
The ABCs of Family Budgeting
Steps in Budgeting
Step 1: Planning a Budget
Step 2: Keeping the Records
Step 3:  Comparing the Records with the Plan
Determining Net Worth
A Budget for College Students
A Sample Budget Form for College Students
THERE’S A LAW FOR THAT: CREDIT PRACTICES RULE
Budgeting and Inflation
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

11  CONSUMER CREDIT, DEBT,  AND BANKRUPTCY
The Debt Syndrome
Historical Use of Credit
Current Use and Volume of Consumer Credit
Formal Sources of Consumer Credit
Other Financial Institutions and Retailers
The Cost of Buying on Credit
Monitoring Personal Credit
Credit Misuse
The 5 C’s of Credit
Pros and Cons of Consumer Credit
Advantages of Using Credit
Disadvantages of Using Credit
Credit Abuses
Bankruptcy
CASE STUDY: DECEPTIVE MORTGAGES
The Decision to Buy on Credit
SUMMARY
THERE’S A LAW FOR THAT: THE FAIR DEBT COLLECTION PRACTICES ACT (FDCPA)
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

12 HOME OWNERSHIP
The American Dream
Dream Versus Reality
What Can Buyers Afford to Pay?
Home Ownership—More Elusive Than Ever?
Financing the Purchase of a House
The Cost of Mortgage Loans
Adjustable-Rate and Other Types of Mortgages
Understanding Mortgage Money
Mortgage-Lending Practices
Private Mortgage Insurance
Title Insurance
The Costs of Owning Versus Renting
The Real Costs of Ownership
The Cost of Renting
If the Choice Is to Buy . . .
CASE STUDY: EQUITY STRIPPING
DIFFERENCES AMONG LENDERS
THERE’S A LAW FOR THAT: REAL ESTATE  SETTLEMENT PROCEDURES ACT (RESPA)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

13 SAVING AND INVESTING
Thrift or Waste?
Why Do People Save?
How Do People Save?
How Much and How Should the Prudent Consumer Save?
Putting Savings to Work
Types of Investments
Concerns of the Small Investor
Investing or Speculation?
Investment and Inflation
Real Estate Investments
Advantages and Disadvantages of Rental Property Investments
Should Small Investors Use Leverage and Invest in Rental Property?
Bonds as an Investment
U.S. Government Bonds
Federal Debt Securities
Municipal Bonds
Corporate Bonds
Certificates of Deposit
Money Market Funds
Corporate Stocks as an Investment
Stock Ownership
Advantages and Disadvantages of Common Stock
CASE STUDY: JUUL IS MORE THAN JUST A VAPING COMPANY?
Guidelines for Investing in Stocks
Fraudulent Practices
How to Buy Common Stocks
Should Small Investors Use Mutual Funds?
Questions and Answers Regarding Mutual Funds
Individual Retirement Accounts, Keogh Plans, and Other Tax Shelters
Saving for Education
Sources of Information and Safeguards
Published Sources of Information
Protection for Investors
THERE’S A LAW FOR THAT: CHECK 21
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

14 UNDERSTANDING AND USING INSURANCE
What Is Insurance?
How Insurance Works
Principles of Sound Insurance
Probability
The Insured Must Incur Loss
Indemnity Must Not Exceed Loss
The Event Insured Against Must Be Determinable
The Event Insured Against Must Be Uncertain
Social Security
Benefits of Social Security
Evaluation of Social Security
How to Meet the Risks of Old Age
Protection Against Property Loss  and Public Liability
Automobile Insurance
Bodily Injury Liability and Property Damage Liability
Medical Payments or Personal Injury Protection
Collision
Comprehensive and Personal Effects
Towing and Labor Costs
Uninsured Motorists
Individual Versus Mass-Marketed Automobile Insurance
Fault or No-Fault Insurance?
Insurance to Cover Accidents and Illness
Costs of Health Care
Patient Protection and Affordable  Care Act (PPACA)
How to Pay for Health Care
CASE STUDY: DEADLY LIFE INSURANCE
Managed Care Plans
Life Insurance
Term Insurance
Permanent Life Insurances
How to Choose a Company
Questions and Answers Regarding Life Insurance
THERE’S A LAW FOR THAT: HEALTH INSURANCE  PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)
Planning an Insurance Program
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION
PART FOUR Help Is on the Way
ASSISTANCE FOR CONSUMERS
SAVVY BUYING
Spending Money
Buyership Versus Sellership
Consumer Decision Making
Becoming Informed
Consumer Reports
Specialty Magazines
U.S. Government Materials
State Government Guides
Other Buying Aids
How to Shop Effectively
Use Advertising Wisely
Internet Shopping
Watch for Lures and Traps
Avoid Impulse Buying
Watch for Sales
Comparison Shop
Bargain for Lower Prices
CASE STUDY:  HELP FROM CONSUMERS UNION  AND CONSUMER REPORTS
Read Labels and Understand Freshness Codes
Check the Quantity
Check Prices and Totals
Consider Cash or Credit
Keep Records and Receipts
Know When and How to Protest
SUMMARY
WEBSITES FOR CONSUMERS
EXPLORING PERSONAL VALUES: PROJECTS
THERE’S A LAW FOR THAT: CONSUMER LEASING  ACT (CLA)
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

16 SELLERS’ EFFORTS TO HELP CONSUMERS
Do Consumers Need Help?
When Consumers Need Help
Common Types of Help from Sellers
Brands and Trademarks
Labels
Warranties
CASE STUDY: CUSTOMER SERVICE HALL OF FAME
Consumer Affairs Managers
Corporate Social Responsibility
Sellers’ Joint Efforts
Better Business Bureaus
Industry and Trade Associations
Arbitration and Mediation Panels
THERE’S A LAW FOR THAT: THE MAGNUSON-MOSS  WARRANTY ACT
Customer Service Departments
Other Types of Help
Testing Laboratories
Consumer Reporting
Is Help Provided by Sellers Reliable?
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

17 CONSUMER LAW
Consumer Laws: Quantity and Quality
What Is Consumer Law?
Statutory Law
Regulatory Law
Constitutional Law
Common Law
The Uniform Commercial Code
Contracts
Mutual Agreement
Competent Participants
Legal Subject Matter
Consideration
Legal Form
CASE STUDY:
Alternative Dispute Resolution
Arbitration
Mediation
Small-Claims Court: The Consumer Court
THERE’S A LAW FOR THAT: GRAMMLEACH-BLILEY ACT (GLBA)
Reasonable Person
Criminal Action and Civil Action
SUMMARY
CONSUMER LAW TERMINOLOGY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

18 STATE AND LOCAL GOVERNMENT EFFORTS TO ASSIST CONSUMERS
Government and the Consumer
Dual Control
Policing Business for Consumers
Regulatory Agencies
CASE STUDY: WHO CONTRIBUTED TO THE OPIOID CRISIS?
State Legislative Activity
Government-Owned Sellers of Consumer Services
Small-Claims Court—The Consumer Court
State Lemon Laws for Automobiles
What State Governments Could Do
How a Bill Becomes State Law
How to Influence State Representatives
THERE’S A LAW FOR THAT: THE TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT OF 1996 (TCPA) AND THE TELEPHONE ROBOCALL ABUSE CRIMINAL ENFORCEMENT AND DETERRENCE ACT OF 2019 (TRACED)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

19  FEDERAL GOVERNMENT EFFORTS TO ASSIST CONSUMERS
Complexities of the Marketplace
Evolution of Federal Legislation
Political Influences
Federal Government Agencies
Federal Trade Commission
Consumer Financial Protection Bureau
Food and Drug Administration
U.S. Department of Agriculture
Consumer Product Safety Commission
Department of Transportation
Department of Justice
Other Federal Agencies
Information Dissemination Activities
Consumer Activities at the White House Level
Termination of Office of Consumer Affairs
CASE STUDY: TOXIC TOYS
OTHER LEGISLATION THAT BENEFITS CONSUMERS
THERE’S A LAW FOR THAT: FAIR CREDIT REPORTING ACT (FCRA)
Other Important Rules
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

Glossary
Index

Wendy Reiboldt

New Nineteenth Edition Now Available!

The nineteenth edition of Consumer Economics leads students through the social, economic, and political forces that shape consumer demand and seller supply. The book provides students with a strong understanding about how the economy operates, the importance of political influences, and how the marketplace works to both serve and deceive consumers. Topics covered include consumer behavior, fraud, technology and social media, advertising, asset management, consumer services, and government efforts to assist consumers. The book helps students become mature and informed consumers by providing practical tips and guidelines on day-to-day choices and decisions for optimal interaction in the marketplace.

This edition has been updated to reflect changing times while maintaining its focus on long term trends and issues. It includes new and updated consumer websites, legislation, and case studies reflecting current marketplace conditions.  Content specific to college students on budgets and fraud provide important and timely information to students. New to this edition is a “Connected” box which allows students to “plug in” to influencers, apps, online content, and government programs with relatable and relevant content.

Wendy Reiboldt's Consumer Economics includes:

  • Web sites for over 200 important consumer sites, allows students to explore a variety of resources regarding consumer information, services, bargains and assistance.
  • Key Terms, Chapter Goals, and Learning Objectives begin each chapter to help students evaluate their comprehension of the content.
  • Boldfaced Key Terms, marginal definitions, and a book-end Glossary offer convenient reference points.
  • FYI, Tips, and Q & A boxes are featured in the margins to deliver brief capsules of information for consideration and discussion.
  • Case Studies and narratives on relevant topics, provide current, thought-provoking questions and provide opportunity for additional exploration.
  • The feature “There’s a law for that…” covers key pieces of consumer-friendly legislation.
  • Chapter Summaries, Review and Discussion Questions, and Exploring Personal Values sections encourage students to dive deeper into course content.
  • Tear out worksheets allow students to obtain instructor feedback (in the paper textbook version!).
  • Companion website provides additional resources, activities, and opportunities for further exploration into subject matter.

Preface
A Note to Readers

PART ONE
Who Are You?

THE CONSUMER IN AMERICA
THE CONSUMER IN A FREE SOCIETY
Introduction
We Are All Consumers
How the Economy Operates
Who Owes What?
Consumers or Producers?
Who Decides What Shall Be Produced?
Consumer Sovereignty
The Classical Economists’ Model
The Institutional Framework
Satisfying Consumer Wants 
What Makes Our Economy Go?
Significant Differences Among Consumers
Collective Consumption
Do Consumers Really Know What They Want?
Can Consumers Determine Quality?
Can Consumers Be Sure of Safety?
Can Consumers Check the Quantity?
Can Consumers Detect Fraud?
Can Consumers Cope with Pricing Practices?
Does Competition Control Prices?
Does Market Price Measure Subjective Value?
The Consumer Movement: A Brief History
The First Era
The Second Era
The Third Era
The Fourth Era: Are We In One?
The Dual Role of Consumers
Consumer Rights
Consumer Responsibilities
Consumer Democracy
Consumers and Social Media
International Consumer Issues
SUMMARY
THERE’S A LAW FOR THAT: TRUTH-IN-LENDING (TILA)
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

2  THE COMPLEXITY OF CONSUMER DEMAND AND SELLER SUPPLY
The Search for Happiness
Do Consumer Wants Have Any Limit?
Can All Wants Be Satisfied?
Four Principles of Consumption
Needs and Wants
Classifying Consumer Goods and Services
The Complexity of Wants
Physiological Needs and Wants
Psychological Wants
CASE STUDY: THE COMPLEXITY OF WANTS
Social Wants
The Role of Groups
Characteristics of Groups
Group Influence
Other Forces Influencing Wants
Environmental Influences
Socioeconomic Influences
Political and Governmental Influences
How Consumer Demand and Seller Supply Come Together
Consumer Demand 45 Seller Supply
THERE OUGHTA BE A LAW: FAIR CREDIT BILLING ACT (FCBA)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

3 CONSUMERS: LEADING AND FOLLOWING
The Family as a Consuming and Producing Unit
Standards and Levels of Living
Family Structure
Who Guides Consumers in the Market?
Consumption Patterns of Minors
Who Guides the Adults?
How Much Guidance?
Putting It All Together
CASE STUDY: ECONOMIC MATURITY  (OR LACK THEREOF)
The Profit-and-Loss Statement:  A Guide to Sellers
Criticisms of the Profit System
Profit over Consumer Welfare
Manipulation of Consumer Demand
Exploitation of Consumers
Does the Economy Produce What Consumers Want?
Demand First or Supply First?
The Economy Produces Enough and More
THERE’S A LAW FOR THAT: THE FAIR PACKAGING AND  LABELING ACT AND RELATED LEGISLATION (FPLA)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

4  CONSUMER FREEDOMS AND RESTRICTIONS
The Concept of Economic Freedom
Wealth, Nealth, and Illth
Conditions Necessary for Freedom of Choice
Free Entry
Full Information
Restrictions on Freedom of Choice
Natural Restrictions
Economic Restrictions
CASE STUDY: BAD CREDIT, NO JOB
Governmental Restrictions
Social Restrictions
Physical and Self-Imposed Restrictions
Conditions Promoting Freedom of Choice
Political Freedom
THERE’S A LAW FOR THAT: EQUAL CREDIT  OPPORTUNITY ACT (ECOA)
Economic Freedom in a Mixed Economy
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

PART TWO Going to Market
THE CONSUMER AND THE MARKETPLACE

5 FRAUD
What Is Fraud?
Deception, Fraud, and “Rip-Offs”
Antitrust Laws
Areas of Fraud
Financial Fraud
Health and Beauty Frauds
Medical and Surgical Frauds
Fraud in Buying and Selling Automobiles
Automobile Repair Swindlers
Counterfeited Products
Education Frauds
Employment Frauds
CASE STUDY: COLLEGE ENTRANCE SCANDAL
Charity and Religious Frauds
Defrauding College Students and Veterans Entering College
Defrauding Older Adults
Defrauding Persons with Low Income
White-Collar Fraud
How Frauds Are Perpetrated
Internet Fraud
Mail Fraud
Telemarketing Schemes
The Persistence of Fraud
Gullible Consumers and Greedy Sellers
Impotent Laws and Poor Enforcement
THERE’S A LAW FOR THAT: THE ELDER ABUSE  PREVENTION AND PROSECUTION ACT (EAPPA)
Are Consumers Helpless?
Fraudulent Buyers
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

6 CONSUMER SERVICES
Automobile Mechanic Services
Attorney Services
Child Care Services
Assisted Living Services
Financial Planning Services
Health Care Services
Pharmacists
Dentists
Vision Care Specialists
CASE STUDY: ELECTRONIC CIGARETTES BACKFIRE
THERE’S A LAW FOR THAT: THE EYEGLASS RULE
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

7 CUSTOMS AND CONSUMPTION
Meaning and Origin of Customs
Why Do Customs Continue?
What Causes Customs to Change?
Ceremonial Customs
Funerary Customs
Choices for Consumers
Marriage Customs
Religious Customs
Other Ceremonial Celebrations
The Phenomenon of Gift Giving
Consumption
Competitive Consumption
CASE STUDY: KEEPING UP WITH “THE JONESES”
Consumer Wants
THERE’S A LAW FOR THAT: THE FTC FUNERAL RULE 136 SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

8  ADVERTISING, MARKETING, AND PRICING
Advertising Around the Clock
Advertising and Marketing Defined
Advertising Expenditures: How Much and Where
Does Advertising Pay?
Benefits of Advertising
Informational Ads
Ads Announcing New Products and Services
New Uses for Known Products
Advertising Prices
Stimulating Competition
Mass Production, Per-Unit Costs, and Pricing
Something for Nothing?
Online Shopping
Free Ads for Public Service
Criticisms of Advertising
Deception in Advertising
Promoting Illth and Nealth
Promoting Dissatisfaction and Fear
Missing the Mark
Misuse of Science and Language
Encouraging Spending
Questionable Testimonials
Concentration of Companies
CASE STUDY: THE PALESSI EXPERIMENT
Who Oversees Advertising?
Better Business Bureaus
Federal Government Control of Advertising
What Consumers Can Do
The Marketing Process
What Is a Market?
Types of Market Situations
The Price System
Traditional Price Theory
Does Price Measure Value?
The One-Price System
Retail Pricing
Pricing Strategies
Pricing: A Science or an Art?
SUMMARY
THERE’S A LAW FOR THAT: MAIL, INTERNET OR TELEPHONEORDER MERCHANDISE RULE (ALSO KNOWN AS THE “30-DAY RULE”)
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

9 ENERGY AND THE ENVIRONMENT
History of Concern with the Environment and Energy
Energy, Fuel, Transportation
CASE STUDY: AUTOMATED DRIVING GONE WRONG?
Environmental Challenges
Conservation and Energy-Saving Measures
Automobiles
Housing
Recycling
Consumer Tips
THERE’S A LAW FOR THAT: CLEAN AIR ACTS
Environmental Groups
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

PART THREE Money Matters
FINANCIAL ISSUES FACING CONSUMERS

10 BUDGETING AND SPENDING
Wise Money Management
Consumer Life Cycle
Spending According to a Plan
Benefits of a Budget
CASE STUDY: COLLEGE STUDENT LOAN  DEBT….RELIEF?
Why Don’t All Families and Individuals Budget?
The ABCs of Family Budgeting
Steps in Budgeting
Step 1: Planning a Budget
Step 2: Keeping the Records
Step 3:  Comparing the Records with the Plan
Determining Net Worth
A Budget for College Students
A Sample Budget Form for College Students
THERE’S A LAW FOR THAT: CREDIT PRACTICES RULE
Budgeting and Inflation
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

11  CONSUMER CREDIT, DEBT,  AND BANKRUPTCY
The Debt Syndrome
Historical Use of Credit
Current Use and Volume of Consumer Credit
Formal Sources of Consumer Credit
Other Financial Institutions and Retailers
The Cost of Buying on Credit
Monitoring Personal Credit
Credit Misuse
The 5 C’s of Credit
Pros and Cons of Consumer Credit
Advantages of Using Credit
Disadvantages of Using Credit
Credit Abuses
Bankruptcy
CASE STUDY: DECEPTIVE MORTGAGES
The Decision to Buy on Credit
SUMMARY
THERE’S A LAW FOR THAT: THE FAIR DEBT COLLECTION PRACTICES ACT (FDCPA)
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

12 HOME OWNERSHIP
The American Dream
Dream Versus Reality
What Can Buyers Afford to Pay?
Home Ownership—More Elusive Than Ever?
Financing the Purchase of a House
The Cost of Mortgage Loans
Adjustable-Rate and Other Types of Mortgages
Understanding Mortgage Money
Mortgage-Lending Practices
Private Mortgage Insurance
Title Insurance
The Costs of Owning Versus Renting
The Real Costs of Ownership
The Cost of Renting
If the Choice Is to Buy . . .
CASE STUDY: EQUITY STRIPPING
DIFFERENCES AMONG LENDERS
THERE’S A LAW FOR THAT: REAL ESTATE  SETTLEMENT PROCEDURES ACT (RESPA)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

13 SAVING AND INVESTING
Thrift or Waste?
Why Do People Save?
How Do People Save?
How Much and How Should the Prudent Consumer Save?
Putting Savings to Work
Types of Investments
Concerns of the Small Investor
Investing or Speculation?
Investment and Inflation
Real Estate Investments
Advantages and Disadvantages of Rental Property Investments
Should Small Investors Use Leverage and Invest in Rental Property?
Bonds as an Investment
U.S. Government Bonds
Federal Debt Securities
Municipal Bonds
Corporate Bonds
Certificates of Deposit
Money Market Funds
Corporate Stocks as an Investment
Stock Ownership
Advantages and Disadvantages of Common Stock
CASE STUDY: JUUL IS MORE THAN JUST A VAPING COMPANY?
Guidelines for Investing in Stocks
Fraudulent Practices
How to Buy Common Stocks
Should Small Investors Use Mutual Funds?
Questions and Answers Regarding Mutual Funds
Individual Retirement Accounts, Keogh Plans, and Other Tax Shelters
Saving for Education
Sources of Information and Safeguards
Published Sources of Information
Protection for Investors
THERE’S A LAW FOR THAT: CHECK 21
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

14 UNDERSTANDING AND USING INSURANCE
What Is Insurance?
How Insurance Works
Principles of Sound Insurance
Probability
The Insured Must Incur Loss
Indemnity Must Not Exceed Loss
The Event Insured Against Must Be Determinable
The Event Insured Against Must Be Uncertain
Social Security
Benefits of Social Security
Evaluation of Social Security
How to Meet the Risks of Old Age
Protection Against Property Loss  and Public Liability
Automobile Insurance
Bodily Injury Liability and Property Damage Liability
Medical Payments or Personal Injury Protection
Collision
Comprehensive and Personal Effects
Towing and Labor Costs
Uninsured Motorists
Individual Versus Mass-Marketed Automobile Insurance
Fault or No-Fault Insurance?
Insurance to Cover Accidents and Illness
Costs of Health Care
Patient Protection and Affordable  Care Act (PPACA)
How to Pay for Health Care
CASE STUDY: DEADLY LIFE INSURANCE
Managed Care Plans
Life Insurance
Term Insurance
Permanent Life Insurances
How to Choose a Company
Questions and Answers Regarding Life Insurance
THERE’S A LAW FOR THAT: HEALTH INSURANCE  PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)
Planning an Insurance Program
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION
PART FOUR Help Is on the Way
ASSISTANCE FOR CONSUMERS
SAVVY BUYING
Spending Money
Buyership Versus Sellership
Consumer Decision Making
Becoming Informed
Consumer Reports
Specialty Magazines
U.S. Government Materials
State Government Guides
Other Buying Aids
How to Shop Effectively
Use Advertising Wisely
Internet Shopping
Watch for Lures and Traps
Avoid Impulse Buying
Watch for Sales
Comparison Shop
Bargain for Lower Prices
CASE STUDY:  HELP FROM CONSUMERS UNION  AND CONSUMER REPORTS
Read Labels and Understand Freshness Codes
Check the Quantity
Check Prices and Totals
Consider Cash or Credit
Keep Records and Receipts
Know When and How to Protest
SUMMARY
WEBSITES FOR CONSUMERS
EXPLORING PERSONAL VALUES: PROJECTS
THERE’S A LAW FOR THAT: CONSUMER LEASING  ACT (CLA)
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

16 SELLERS’ EFFORTS TO HELP CONSUMERS
Do Consumers Need Help?
When Consumers Need Help
Common Types of Help from Sellers
Brands and Trademarks
Labels
Warranties
CASE STUDY: CUSTOMER SERVICE HALL OF FAME
Consumer Affairs Managers
Corporate Social Responsibility
Sellers’ Joint Efforts
Better Business Bureaus
Industry and Trade Associations
Arbitration and Mediation Panels
THERE’S A LAW FOR THAT: THE MAGNUSON-MOSS  WARRANTY ACT
Customer Service Departments
Other Types of Help
Testing Laboratories
Consumer Reporting
Is Help Provided by Sellers Reliable?
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

17 CONSUMER LAW
Consumer Laws: Quantity and Quality
What Is Consumer Law?
Statutory Law
Regulatory Law
Constitutional Law
Common Law
The Uniform Commercial Code
Contracts
Mutual Agreement
Competent Participants
Legal Subject Matter
Consideration
Legal Form
CASE STUDY:
Alternative Dispute Resolution
Arbitration
Mediation
Small-Claims Court: The Consumer Court
THERE’S A LAW FOR THAT: GRAMMLEACH-BLILEY ACT (GLBA)
Reasonable Person
Criminal Action and Civil Action
SUMMARY
CONSUMER LAW TERMINOLOGY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

18 STATE AND LOCAL GOVERNMENT EFFORTS TO ASSIST CONSUMERS
Government and the Consumer
Dual Control
Policing Business for Consumers
Regulatory Agencies
CASE STUDY: WHO CONTRIBUTED TO THE OPIOID CRISIS?
State Legislative Activity
Government-Owned Sellers of Consumer Services
Small-Claims Court—The Consumer Court
State Lemon Laws for Automobiles
What State Governments Could Do
How a Bill Becomes State Law
How to Influence State Representatives
THERE’S A LAW FOR THAT: THE TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT OF 1996 (TCPA) AND THE TELEPHONE ROBOCALL ABUSE CRIMINAL ENFORCEMENT AND DETERRENCE ACT OF 2019 (TRACED)
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

19  FEDERAL GOVERNMENT EFFORTS TO ASSIST CONSUMERS
Complexities of the Marketplace
Evolution of Federal Legislation
Political Influences
Federal Government Agencies
Federal Trade Commission
Consumer Financial Protection Bureau
Food and Drug Administration
U.S. Department of Agriculture
Consumer Product Safety Commission
Department of Transportation
Department of Justice
Other Federal Agencies
Information Dissemination Activities
Consumer Activities at the White House Level
Termination of Office of Consumer Affairs
CASE STUDY: TOXIC TOYS
OTHER LEGISLATION THAT BENEFITS CONSUMERS
THERE’S A LAW FOR THAT: FAIR CREDIT REPORTING ACT (FCRA)
Other Important Rules
SUMMARY
EXPLORING PERSONAL VALUES: PROJECTS
ADDITIONAL SOURCES OF INFORMATION
ITEMS FOR REVIEW & DISCUSSION

Glossary
Index

Wendy Reiboldt
Wendy Reiboldt