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CHAPTER 4 SUMMARY

Consumer Rights and Protections

• Consumer spending represents the largest portion of the U.S. gross domestic product.

• American consumers enjoy a number of basic consumer rights but also must accept certain responsibilities for their decisions and behaviors.

• Consumer protection in the United States is a shared responsibility among federal agencies, local authorities, consumer organizations, businesses, and consumers.

Consumer Movements

• The local consumer movement works mainly on local consumer issues.

• The national consumer movement increases consumer power through national consumer organizations and individual initiatives.

• The international consumer movement addresses many quality of life issues in the global economy.

Consumer Behavior

• Utility theory helps explain consumer behavior by examining how incremental changes in satisfaction affect people's buying decisions.

• The income and substitution effects note how a price change affects people's buying decisions.

• Consumer surplus measures well-being by comparing the price a consumer is willing to spend for a product with the market price.

• Advertising is a paid announcement by a firm designed to increase the demand for a product.

Consumer Issues

• Credit, when used responsibly, adds convenience to a consumer's buying decisions.

• Bankruptcy is a last-resort measure that reduces or eliminates unsustainable debt.

• Consumer cooperatives are nonprofit, member-owned businesses that provide products, jobs, or other benefits to members.

• Sustainable consumption protects future generations' consumption.

 
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