Module 1

AN INTRODUCTION TO
cONSUMER
EDUCATION
THE 222
CONSUMER economics
LESSON 1
Make decisions
LESSON 2
Understand economic system
LESSON 3
Consumer‘s role in the
economy
 lesson 1 - make
decisions
As you go through this lesson, you are expected to;

describe each of the five steps in

decision-making process;
Value the importance of the five steps in
the decision-making process in purchasing
a new product
Decision making process
You can follow a five-step
decision-making process. If
you follow this decision-
making process whenever
you make a consumer
choice, you will make a
rational buying decision.
The steps in the decision-making
process are as follows:
Specify - Identify the need or want that you
are trying to fulfill.

Search - Gather information about choices

you could make.

Sift - Evaluate your options.

Select - Make a choice and act on it.

The consumer decision-making process
1 need recognition

information searching and

2 process

identifcation and evaluation of

3 alternatives

4 Purchase Decision
COMPLEX SIMPLE
Decision making Decision making

5 Post-purchase behavior
CONSUMER DECISION MAKING

SPECIFY
Need or Want?
Goals
Values
CONSUMER DECISION MAKING

Search
Plan your Search
Avoid Impulse
Purchase
CONSUMER DECISION MAKING

Sift select

study
 lesson 2 -Understand
economic system
As you go through this lesson, you are expected to;

enumerate the four economic systems; and

explain how demand and supply work
 ECONOMIC SYSTEMS
An economic system is a
way a nation uses resources
to produce goods and
services.

Human Resources Non-human Resources

Are the skills, training, and
abilities people have to
complete the task that
results in the production of
goods and services
Are the raw materials,
tools, and manufactured
products, such as oil,
tractors, and lumber, that
are used to make goods
and services.
Economics
Economics is the study of how we make use
of our resources.

Traditional Economy - In a traditional economy,

ways to produce products are passed from one
generation to the next.
Characteristics of a traditional economic system
Based on small
communities, Hunter and Relies on barter Produce what is
families and gatherer society needed
tribes
 Command Economy - In a command economy,
the government owns most resources and makes most
economic decisions.

Characteristics of a command economic system

Government/ Government/ Slow to Entrepreneur-
Central powers Central powers respond to ship is
own the means decide what is economic suppressed-
of production produced and change due to contributing to
how much centralised fewer choices
nature of power
 Market Economy - In a market economy, people,
rather than the government, own the resources and run
the businesses.

Characteristics of market economic system

Private Government Run on self- Based on
enterprise owns does not interest and market
the means of involve itself in competition- mechanisms of
production economic which benefits supply,
decisions society through demand, and
the invisible prices which
hand allocate
resources
 profit
Profit is the difference between the money received from
selling a product and the cost of producing that product.
profit-price-cost - Individuals, not the government, make most
economic decisions in a market economy.
Mixed Economy - Some economy is a mixture of
a market economy with some aspects of a command
economy (government control), some system is a mixed
economy
 Characteristics of mixed economic system
Means of Government
production is influences Profit is the
controlled by supply and Capital is main driver, but
both private demand reallocated governments
enterprises and through based on need use these to
government regulation and help improve
interventionist social mobility
policies
 demand and supply
Scarcity is the situation in which consumer's wants are
greater than the resources available to satisfy those
wants. Resources are required to produce goods and
services, and resources are limited.

demand - Demand is the quantity of a good or service that

consumers are willing and able to buy at various prices during a
given period.
 Market forces

falling
prices

rising supply declining demAND

rising
prices
falling supply INCREASING DEMAND
supply - Supply is the quantity of a product that producers are
willing and able to make available for sale at various prices
over a given period.

equilibrium - The equilibrium price for a product is the price at

which the quantity supplied exactly equals the quantity
demanded of that product.
 surplus - What happens if taco
producers raise the price to P100.00 Surplus graph
each?

According to the law of demand,

consumers will buy fewer tacos. In
the surplus graph, the price of
P100.00 corresponds to a quantity
of 50 on the demand curve.
shortage - The market forces of
supply and demand cause prices Shortage graph
to reach equilibrium no matter
which way they go. In the
shortage graph, you can see the
result if prices fall below the
equilibrium price.
 lesson 3 -consumer’s
role in the economy
As you go through this lesson, you are expected to;

explain the role of consumers in determining

what is produced in market economy; and
value the importance of competition in a
market economy
 MAKING DECISIONS IN A MARKET
ECONOMY
In a market economy, customers and
businesses operate without government
interference. Costumers are free to buy.
Producers are free to sell.

Information for the Economy - Exchanges in a

market economy do more than benefit buyers
and sellers. They also provide Information that
helps the economic system work.
 When customers buy
items, merchants
The Merchant (retailers) gain information
about customers' buying
habits.

The merchant's request

for more sweaters might The
cause the manufacturer to Manufacturer
place new orders for wool.
 Prices also provide
information that
Prices influences a market
economy.

Three basic choices to consider in pricing:

1. Lower the price
2. Convince customers to pay the
higher price.
3. Stop offering the product for sale.
 The most important
The Profit reason to run a business in
Motive a market economy is to
earn a profit Companies
that do not earn a profit
will not last.

Increase profits in three ways:

1. Reduce Costs
2. Change Price
3. Increase Quantity of Products
Sold
Consumer economics is
the study of the role Consumer
consumers play in an Economics
economic system.

Consumer choices
Consumers in determine what goods
Charge and services are produced.
 Competition is at the
heart of market Benefits of
economies. Competition Competition
forces businesses to serve
consumers. The only way
companies can earn a
profit is to offer good
quality products that
consumers want to buy at
a fair price.
 Efficiency
and Profits
Businesses use resources to create goods
and services, and resources cost money.
Companies must pay workers and buy raw
materials and equipment. As companies
compete, they must find ways to use their
resources efficiently.
Profitable Companies are doing three
things:
1. Selling products
consumers want to buy.
2. Selling products at a price
consumer are willing to pay.
3. Taking in more money
from sales than the
company spends to produce
the products.
 As a consumer, you
play a vital role in our
economic system. As
you buy goods and
services, you create
sales that provide
profit. To carry out
your role in the
economy, you need to
make good choices.
 lesson 1
CONSUMER economics
As you go through this
lesson, you are expected to;
identify several important
values you hold;
describe what an opportunity
costs
Have you ever heard the phrase
the customer is always right?
If businesses want to make a profit, they have
to offer customers products they want. If
they do not give customers what they want,
customers will go to other businesses that do
or buy nothing at all. A business cannot
succeed without customers.
 values
Knowing your values is a good place to begin.
Values are your principles the standards by which
you live. When you list your values, you are
making judgments. You decide what is right or
wrong, good or bad, important or unimportant for
you.

Life Values - are the principles that are most

important to you in life. Wanting to spend time
with your friend and family is an example of a
life value.
Work Values - are the principles that are important to you in your
work. Wanting to earn a living by working for a business that
respects the environment is an example of a work value.
 Cultural Values - are principles that are
important to you because of your ethnic
heritage or religion.
Social Values - are principles that are
important to you because of the community
in which you live.
Demographic values - are principles that
are important to you because of how and
where people live.

What in the World?

Values can vary greatly among different countries and cultures.b
India the cow is sacred to Hindus. They regard eating a beef ham
burger to be a sin. To Indian Muslims, eating pork is offensive.
 Values Change - Values are not constant.
Your values will change as you learn and
grow. This is also true for societies as a
whole.
Different People, Different Values -
Suppose you have P500.00 to spend. You
decide to use your money to buy
hamburgers and fries. In the same situation,
your best friend would spend the money on
a lip tint and face powder.
Goals - The things you want to accomplish in your life are
goals that come from your values, your needs and wants, and
your hopes and dreams.
 Needs and Wants
NEEDS WANTS
Needs are things you Wants are the things that
cannot live without. you would like to have but
can live without.
Hopes and Dreams
Just a quick survey
1. What do you want to do for a living after you graduate?
2. What do you want to own in the future?
3. What kind of person do you want to be?
 Short - Term Goals - Short-term goals are
things you hope to accomplish within a
year.
Work to Reach Your Goals - Knowing
your goals is just the first step. The next
step is to plan how you will reach them.
Opportunity Cost - Opportunity cost is the
value of your next best alternative
whenever you make a choice.
Opportunity Cost and Decisions - When making a decision,
consider the things you have to give up or not have.
Consider Other Options- Consider your values, your needs,
and wants your hopes and dreams, and your opportunity
costs.
A Life-Span Plan - A life-span plan is a
strategy people create to help them achieve
their life-span goals.
YOUR LIFE SPAN
birth death

Infancy Childhood Young Adult Mature Adult Retired Elderly

School Job Career Travel

Advanced Education Care for Parents
Raise Children Community Service
Home Ownership Medical Care

EVENTS IN YOUR LIFE CYCLE

 LESSON N0. 2
CONSUMER RIGHTS AND
RESPONSIBILITIES
As you go through this
lesson, you are expected to;
describe the responsibilities
of consumers
value the importance of eight
consumer rights
 Do you know your
rights as a
consumer?
Our country upholds a constitution because it maintains
order in the society and protects the citizens with rights
that some people fought for written in black and white.
Republic Act No. 7394 or The Consumer Act of the
Philippines “is the policy of the State to protect the
interests of the consumer, promote his general welfare
and to establish stndards of conduct for business
industry.
Get to know the rights
1. Right to Basic Needs
This guarantees survival, adequate food, clothing, shelter, health
care, education, and sanitation to everyone.
2. Right to Safety
This protects consumers against the marketing of hazardous goods
and services.
3. Right to Information
This protects consumers against dishonest or
misleading advertising or labeling.

4. Right to Choose
This is the consumers' right to choose from various products
at competitive prices with an assurance of good quality.
Get to know the rights
5. Right to Representation
This provides the consumer with the right to input consumer interest
or concern in governmental policies.
6. Right to Redress
This provides the consumers with the right to compensate for the
misrepresentation of poor quality goods or unsatisfactory services.
7. Right to Consumer Education
This is the consumers' right to obtain the necessary
knowledge and skills to be an informed customer.

8. Right to a Healthy Responsibilities

This is the consumers' right to live and work in an environment
that is neither dangerous nor threatening to promote well-being.
 CONSUMERS HAVE FIVE
RESPONSIBILITIES
CRITICAL AWARENESS
The consumer's
responsibility to be more
alert and questioning
about the use, price, and
quality of products and
services. ACTION
The consumer's
responsibility to assert
themselves and act to
ensure that you get a fair
deal.
SOCIAL CONCERN
The consumer's
responsibility to be aware
of the impact of our
consumption on other
citizens, especially the
less fortunate, exploited,
disadvantaged, or groups
whether in the local,
national, or international
community.
 CONSUMERS HAVE FIVE
RESPONSIBILITIES
ENVIRONMENTAL
AWARENESS
The consumer's
responsibility to SOLIDARITY
understand the
environmental The consumer's
consequences of your responsibility to organize
consumption. together to develop the
strength and influence to
promote and protect the
rights, welfare, and
interests of the consuming
public.
 Thank You
for Listening!
God bless and have a great day
ahead.
group 1 - btled2a
members:
sayon abella
abubo quibol
badayos sales
morales montederamos
casquete