Chapter 3 Personal Finance

What and who measures inflation? The Consumer Price Index (CPI) and the US Government
What is cost of living adjustment (COLA)? Helps ppl keep up with cost of living. Standard of living increases.
Why Businesses need a normal profit To survive and grow
Why does it cost a lot to create a new product? Research and Development is a expensive
value based pricing Setting the price based on buyer’s perceptions of value rather than on the seller’s cost.
Market based pricing Setting prices to be competitive with prices of similar products currently being sold
Why is product differentiation important? Sets them apart. Some ppl are willing or not willing to pay more/less for certain features on products
What types of buying leads to buyers remorse? Emotional and Impulse because people have regrets
Banner Ad A graphic advertisement that, when clicked on, links to another Web site.
3 laws that define consumer rights Consumer Bill of RightsAirline passenger Rights Consumer Technology Bill of Rights
Rights of Airline passengers Right to confirmed reservation Right for hardshipsRight for a refund
Warning labels Influence consumer judgement
care label On how to clean, wash/dry, and preserve the product
What do changing prices affect? Consumers and producers
As inflation increases, what happens to the dollar and standard of living? They will go down
What consumer strategies do consumers use at different times? Optimizing and Economizing
True or false generic drugs are not as affective as brand name False
What prices are always higher than sales prices? Liquidation
When prices increase, the value of money Decreases
Optimizing can lead to _____ Over spending
What act protects your billing and health information? HIPPA
3 things in consumer bill of rights Right to safety Right to consumer eduRight to be informed

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