Consumer Economics Issues in America

by Garman, E. Thomas

• ISBN13: 9780759352629
• ISBN10: 0759352623
• Edition: 9th
• Format: Hardcover
• Copyright: 2005-08-15
• Publisher: Custom Publishing

Summary

The ninth edition of Consumer Economic Issues in America, is a comprehensive update of one of the most thorough and readable texts in the field. The text is straightforward and highlights the fundamental consumer economic issues affecting all consumers. Author E. Thomas Garman educates and empowers students as they gain knowledge of their rights and responsibilities as consumers. An emphasis is placed on understanding the American economic system, consumer concepts, evaluative criteria and environmental issues. The book takes a normative, pro-consumer viewpoint.

Table of Contents

Preface	xxvii
Foreword	xliii
Virginia H. Knauer
About the Author	xlv
Part One: Some Perspectives
What is the Consumer Interest?	1	(22)
Economic Activities Performed by Consumers	3	(2)
Earning	3	(1)
Consuming	3	(1)
Utilizing	4	(1)
Borrowing	4	(1)
Saving	4	(1)
Investing	5	(1)
Taxpaying	5	(1)
Consumer Sovereignty in the Marketplace	5	(1)
Consumer Problems in an Imperfectly Competitive Market	6	(2)
What Are ``Consumer Problems?''	6	(1)
Consumers Shop in Imperfect Markets	6	(1)
The Seller-Consumer Conflict Will Always Exist	7	(1)
The Consumer Interest	8	(3)
A Price-Quality Model is Useful but Incomplete	8	(1)
The Consumer Interest is About Value for Money and Equity	9	(1)
Consumer Interest #1: Seeking Value for Money	9	(1)
Consumer Interest #2: Seeking Equity for All Consumers	10	(1)
Eight Important Consumer Rights	11	(2)
The Consumer Interest as a Special Interest Group	13	(1)
The Interests of Consumers Differ from Public and Business Interests	14	(4)
Economic Insight: Discrimination Harms Consumers and Sellers	15	(1)
Issue for Debate: Young Shoppers are Discriminated Against	15	(1)
The Public Interest	16	(1)
One's Consumer and Public Roles Differ	16	(1)
Business and the Consumer Interest	16	(1)
Government Often Promotes the Consumer Interest	17	(1)
Conflicts Between the Public and Consumer Interests	18	(1)
How Consumers Pursue Their Interests	18	(2)
Review and Summary of Key Terms and Concepts	20	(1)
Useful Resources for Consumers	21	(1)
``What Do You Think'' Questions	21	(2)
The Consumer Movement	23	(19)
The Early Periods of the Consumer Movement	23	(4)
Awakening to Consumer Problems: Before 1890	23	(1)
Early Consumer Movement: The 1890s through the 1920s	24	(1)
Renewed Consumer Interest: 1929 through the 1950s	25	(2)
Consumerism: The 1960s and Early 1970s	27	(1)
Responses to Consumerism	28	(4)
Business Response	29	(1)
Did You Know? Ralph Nader is the Nation's Leading Consumer Advocate	30	(1)
Government Response	31	(1)
Did You Know? Social Change is an Evolutionary Process	32	(1)
What Makes Consumer Movements Successful?	32	(5)
Rising Expectations of Consumers	32	(1)
Scandals and Dramatic Crises	33	(1)
Charismatic People	33	(1)
Active Government Organizations	34	(1)
Active Private Organizations	35	(1)
Poor Economic Conditions	36	(1)
Today's Consumer Movement	37	(2)
Economic Insight: What Does the Consumer Movement Do?	38	(1)
Review and Summary of Key Terms and Concepts	39	(1)
Useful Resources for Consumers	40	(1)
``What Do You Think'' Questions	40	(2)
Part Two: Facing Consumer Problems Successfully
Consumer Rights, Responsibilities and Remedies	42	(25)
Legal Rights of Consumers	42	(2)
Implied Warranty Rights are Powerful Legal Rights	43	(1)
Warranty of Merchantability	43	(1)
Warranty of Fitness for a Particular Purpose	43	(1)
Express Warranty Rights	44	(1)
Consumer Update: Do You Have to Mail in the Warranty-Registration Card?	44	(1)
Key Consumer Economic Concept: Rule #1 of Consumer-Life---When in Doubt About a Purchase, Always Put it on Your Credit Card	45	(1)
Other Legal Rights Exist	45	(1)
Moral Rights of Consumers are Legitimate Expectations	45	(2)
General Moral Rights	45	(1)
President Kennedy's Consumer Bill of Rights	46	(1)
Consumer Rights for All Americans	46	(1)
Issue for Debate: Colleges Should Publish Quality Indicators for Students	47	(1)
Responsibilities of Consumers	47	(3)
Regarding the right to choose, consumers have the responsibility to	47	(1)
Regarding the right to safety, consumers have the responsibility to	47	(1)
Regarding the right to information, consumers have the responsibility to	48	(1)
Regarding the right to voice (or to be heard), consumers have the responsibility to	48	(1)
Regarding the right to redress or remedy, consumers have the responsibility to	48	(1)
Regarding the right to environmental health, consumers have the responsibility to	48	(1)
Regarding the right to service, consumers have the responsibility to	48	(1)
Regarding the right to consumer education, consumers have the responsibility to	49	(1)
Key Consumer Economics Insight: Privacy in Consumer Transactions is Under Threat	49	(1)
Why People Don't Complain	50	(1)
Remedies to Resolve Consumer Problems	51	(1)
Effective Complaining Should Follow a Sequence	52	(5)
The Local Business	53	(1)
The Manufacturer	53	(1)
Did You Know? How to Get a Copy of the Consumer Action Handbook	53	(1)
Self-Regulatory Organizations	53	(3)
Consumer Action Agencies	56	(1)
Consumer Update: Complain on Internet Gripe Sites	56	(1)
Small Claims and Civil Courts	57	(1)
Use Small Claims Lawsuits to Sue When Necessary	57	(1)
Damages to Ask for When Suing	58	(1)
How Consumers Can Break a Contract	58	(1)
Did You Know: How to Get Out of a Contract	59	(1)
Techniques of Last Resort: How to Fight Back---And Win!---Against Rip-offs and Frauds	59	(4)
Did You Know? Consumer Power Disciplines and Improves the Marketplace	56	(4)
Review and Summary of Key Terms and Concepts	60	(3)
Useful Resources for Consumers	63	(1)
``What Do You Think'' Questions	63	(2)
Appendix Issue 3-A: Writing a Letter of Complaint	65	(2)
Rip-offs and Frauds in the Marketplace	67	(41)
Why Rip-offs and Frauds Exist in the Marketplace	68	(1)
General Guidelines to Avoid Rip-offs and Frauds	69	(3)
Be Cautious in Marketplace Dealings	69	(1)
Issue for Debate: Consumers Accept the False Promises of Television Commercials	70	(1)
Ask Lots of Questions	70	(1)
Things Never to Do	71	(1)
Be Informed Before Going Shopping	71	(1)
Know Your Rights	72	(1)
Be Alert to Signs of Being Ripped Off	72	(1)
When in Doubt	72	(1)
Economic Fraud is Rampant Among Big Corporations	72	(4)
Consumer Update: Top Ten Corporations that Lied to Fleece Consumers	75
Internet Frauds and Scams	74	(2)
Rip-offs---and There Are Many---Are Not Illegal	76	(9)
Issue for Debate: The State Lottery Rip-off is Against the Consumer Interest	77	(1)
Rental Cars---A Scumball Industry that Rips Off Consumers	78	(1)
Rental Car Prices that ``Take You for a Ride''	78	(1)
Prepaid Gas Option and Hidden Fees are Rip-offs	78	(1)
Overpriced, Unneeded Insurance	78	(1)
Credit- and Debit-Card Registration Services---Rip-offs?	79	(1)
Identity Theft Insurance---Rip-off?	79	(1)
Diet, Health and Fitness Products---Rip-offs?	80	(1)
Weight-Loss Products and Centers---Rip-offs?	80	(1)
Consumer Update: Job Search Companies---Rip-offs?	81	(1)
Supplemental Insurance (Health, Cancer, Life)---Rip-offs?	81	(1)
Credit-Life, Disability- and Unemployment-Insurance	81	(1)
Income Tax Refund Anticipation Loans---Rip-offs?	82	(1)
A List of Probable Rip-Offs	82	(1)
A List of Probably Rip-Offs	82	(3)
Key Topic in Consumer Economics: Be Aware of Identity Theft	85
Negative Option Buying Plans---Rip-offs?	84	(1)
Deceptions and Unfair Practices	85	(4)
Unfair and Deceptive Advertising	85	(2)
Proving Deceptions and Unfair Practices	87	(1)
Consumer Update: The Five Biggest Lies Told to Consumers	87	(1)
Puffery Statements are Legal	88	(1)
Bait and Switch Advertising is Illegal	88	(1)
Consumer Update: Classified Advertisements are Full of Lies	88	(1)
Telemarketing and Mail Scams	89	(6)
Mail Fraud	89	(1)
Telemarketing to Get Your Money	89	(1)
Consumer Update: Telemarketing Crooks Can Get Your Cash	90	(1)
Sweepstakes	90	(1)
Fake Sweepstakes Clubs	91	(1)
Prizes and Free Gifts	91	(1)
Consumer Update: Gifts and Prizes...What They Really Are	92	(1)
Contests	93	(1)
Many Charities Are Not What They Claim to Be	93	(1)
Consumer Update: Telemarketing Recovery Room Scams	94	(1)
Pricing and Buying Rip-offs	95	(3)
Hidden Product Prices Deceive Consumers	95	(1)
Buying Clubs	96	(1)
Coupon Books	97	(1)
Vacation Certificates	97	(1)
Rent-to-Own	98	(1)
Vehicle Sales and Repairs	98	(2)
High-Balling the Value of the Trade-in Allowance	98	(1)
Low-Balling the Price of a New Vehicle	99	(1)
Automobile Repair Scams	99	(1)
Investment Swindles	100	(5)
The Investment Swindler's Game	100	(1)
Consumer Update: Many Infomercials are Rip-offs	101	(1)
Ponzi Schemes Are Illegal	101	(1)
Pyramid Schemes Are Illegal	101	(1)
Consumer Update: Referral Rebate Sales are Illegal Pyramid Schemes	102	(1)
Consumer Update: Chain Letters are Illegal Pyramid Schemes	103	(1)
Multi-Level Network Marketing Investments Are Legitimate	104	(1)
Financial Planning Seminars	104	(1)
Student Traveling Sales Jobs	104	(1)
Review and Summary of Key Terms and Concepts	105	(1)
Useful Resources for Consumers	106	(1)
``What Do You Think'' Questions	107	(1)
Laws That Help Consumers	108	(40)
Laws on Sales Transactions	108	(12)
Telemarketing Regulations	109	(1)
``Do Not Call'' Registry	109	(1)
Rules Telemarketers Must Follow	110	(1)
Charitable Solicitations Regulations	110	(1)
``900-Number'' FCC Regulations	111	(1)
Switching or ``Slamming'' Telephone Regulations	111	(1)
Unordered Merchandise Regulations of the Postal Service	112	(1)
Negative Option Mail-Order Rule of the FTC	112	(1)
FTC's Mail and Telephone Order Merchandise Regulations	113	(1)
COD (Cash on Delivery) Rule of the Postal Service	113	(1)
FTC's Door-to-Door Sales Cooling-Off-Period Regulations	113	(1)
Door-to-Door Sales Cooling-Off-Period Laws in States	114	(1)
Cooling-Off Laws for Health Spas, Timeshares, Campground Contracts, Mortgage Refinancing, Mortgage Refinancing, Credit Repair	115	(1)
Vehicle Leasing	115	(1)
Airline Travel Rights	115	(1)
Delayed or Canceled Flights and Missed Connections	116	(1)
Bumping	116	(1)
Delayed and Lost Luggage	117	(1)
Pet Lemon Laws	117	(1)
Weight-Loss Center Laws	117	(1)
Rent-to-Own Laws	118	(1)
Deliveries and Installations Laws	118	(1)
Moving Companies	118	(1)
Bank Insurance Sales	118	(1)
Privacy Laws	119	(1)
Opt Out of Offers for Credit Cards and Other Financial Products	119	(1)
Opt Out of Mail, Telephone and E-mail (Business Sponsored System)	120	(1)
Internet Privacy Law	120	(1)
Medical and Banking Privacy Laws	120	(1)
Privacy Complaints	120	(1)
Laws on Vehicles	120	(4)
Odometer Fraud Law	120	(1)
Motor Vehicle ``Buyer's Orders'' Laws	121	(1)
Lemon Laws for New Vehicles	121	(1)
Used Vehicle Lemon Laws	122	(1)
Used Vehicle Lemon Branding Laws	122	(1)
Secret Warranty Disclosure Laws for Vehicles	122	(1)
Federal Trade Commission Used Car Rule	122	(1)
Vehicle Repair Laws	123	(1)
Laws on Warranties	124	(2)
Magnusson-Moss Warranty Act	124	(1)
Standards for Companies that Offer Warranties	124	(1)
Disclaiming Implied Warranties is Prohibited Except When Something is Sold ``As Is''	125	(1)
Full and Limited Warranties May Be Offered	125	(1)
Did You Know? What Those Confusing Warranty Phrases Mean	126
Informal Dispute Procedures are Encouraged	125	(1)
Laws on Housing	126	(2)
Renter's Security Deposits	126	(1)
Late Possession of the Rental Property	127	(1)
Habitability of Rental Unit	127	(1)
Community Reinvestment Act	127	(1)
Fair Housing Act	127	(1)
Home Mortgage Disclosure Act	128	(1)
State Housing Discrimination Laws	128	(1)
Laws on Credit	128	(11)
Limited Liability on Credit Cards	128	(1)
Electronic Funds Transfer Act	129	(1)
The EFTA Applies to Electronic Transfers, Debit Cards, and Credit Cards Used as Debit Cards	129	(1)
Correcting EFT Errors on Periodic Statements	129	(1)
Lost EFT Cards	130	(1)
Did You Know? Your Insurance Likely Already Covers Lost Credit and Debit Cards	130	(1)
Automatic-Billing Disputes	130	(2)
Fair Credit Reporting Act	132	(1)
Consumers Have the Right to Know the Contents of Their Credit File, Including Medical Information	132
Did You Know? How to Get a Copy of Your Credit Report	131	(1)
Rights Exist if a Poor Credit Report Results in an Adverse Action	132	(1)
Fair Credit Billing Act	133	(1)
Consumers Get to Keep $50 of the Disputed Amount if the Credit Card Company Fails to Follow the Rules	134	(1)
Reason #1 to Challenge a Credit Bill---Consumers are Not Liable for the Errors of Others	134	(1)
Reason #2 to Challenge a Credit Bill---It Appears to Be an Unauthorized Charge	135	(1)
Reason #3 to Challenge a Credit Bill---Unsatisfactory Goods	135	(1)
When Necessary, Consumers Should Write Firm Letters to Merchants and Credit Card Companies	135	(1)
Equal Credit Opportunity Act	136	(1)
Fair Debt Collection Practices Act	136	(1)
Fair Credit and Charge Card Disclosure Act	137	(1)
Did You Know? Refuse to Pay Punitive Interest Rates	137	(1)
Home-Equity Loan Consumer Protection Act	137	(1)
Home Ownership and Equity Protection Act	138	(1)
High Cost Mortgage Act	138	(1)
Review and Summary of Key Terms and Concepts	139	(1)
Useful Resources for Consumers	140	(1)
``What Do You Think'' Questions	141	(1)
Appendix Issue 5-A: Sample Letters Challenging Credit Card Charges	142	(6)
Complaint Letter Challenging an Error on a Credit Card Bill	142	(1)
Complaint Letter to Merchant Requesting Credit for an Unsatisfactory Purchase	143	(1)
Complaint Letter to Credit Card Company About an Unsatisfactory Purchase	144	(1)
Complaint Letter to Supervisor at Credit Card Company	145	(1)
Example of an ``Explanatory Consumer Statement'' to Add to One's Credit Report to Tell the Consumer's Side of a Dispute	146	(2)
Part Three: The Challenging MARKETPLACE
The Capitalistic American Marketplace	148	(28)
How an Economic System Functions	148	(5)
Socialism as an Economic System	149	(1)
Capitalism as an Economic System	150	(1)
Property Rights	150	(1)
Profit Motivation	151	(1)
Competition	151	(2)
Mixed Economic Systems Predominate Today	153	(1)
Allocating Resources in the U.S. Economy	153	(6)
Types of Resources	153	(1)
Economic Insight: Capitalism is Full of Shortcomings	154
Resource Availability	153	(1)
How Resources are Allocated	154	(1)
The Price Mechanism at Work	155	(1)
An Economic Focus On . . . Standard and Level of Consumption and Living	155	(2)
The Circular Flow of Economic Activity	157	(1)
The Multiplier Effect	158	(1)
How the U.S. Government Tries to Manage the Economy	159	(4)
Fiscal Policies: Taxing and Spending	159	(2)
Did You Know? Bush's Gigantic Federal Budget Deficits
Monetary Policies: Managing Money and Credit	161	(1)
Reserve Requirements	162	(1)
Open-maker Operations	162	(1)
Discount Rate	163	(1)
Scarcity, Democracy, and Capitalism are at the Essence of American Society	163	(1)
Scarcity	163	(1)
Democracy	164	(1)
Capitalism	164	(1)
Broad Social and Economic Goals of American Society	164	(9)
Primary Goal: Economic Freedom	165	(1)
Primary Goal: Economic Efficiency	165	(1)
Primary Goal: To Promote Public Well-being and Safety	166	(1)
Primary Goal: Full Employment	166	(1)
Primary Goal: Price Stability	166	(1)
Stages in the Economic Cycle	167	(1)
Primary Goal: Economic Growth	168	(2)
Economic Insight: Indicators of Economic Confidence	170
Primary Goal: Economic Productivity	169	(3)
Primary Goal: Economic Security	172	(1)
Economic Insight: Taxes are Low on Low-and Middle-income People
Primary Goal: Economic Equity and Justice	172	(1)
Review and Summary of Key Terms and Concepts	173	(1)
Useful Resources for Consumers	174	(1)
``What Do You Think'' Questions	175	(1)
Economic Concepts Critical to Consumer Success	176	(20)
Demand in a Market Economy	176	(4)
How Demand Affects Prices	177	(1)
The Demand Curve Slopes Downward and to the Right	177	(2)
Demand is Characterized by its Elasticity	179	(1)
Supply Affects Prices	180	(2)
The Supply Curve Slopes Upward to the Left	181	(1)
Several Non-Price Determinants of Supply Exist	182	(1)
Market Equilibrium is the Ideal Where Price Meets Supply	182	(2)
When Supply and Demand Does Not Work	184	(1)
Farm Prices Often are Not Set by Supply and Demand	184	(1)
Price Ceilings are Occasionally Imposed by Government	184	(1)
Price-Fixing Eliminates the Competitive Forces of Supply and Demand	185	(1)
Income and Substitution Effects	185	(7)
Opportunity Cost	185	(1)
Did You Know? Going to College Has Opportunity Costs	186	(1)
Marginal Cost	186	(1)
An Economic Focus On...The Propensity to Consume	186	(3)
Diminishing Marginal Utility	189	(1)
An Economic Focus On...Indifference Curve and Budget Line Analysis	189	(3)
Review and Summary of Key Terms and Concepts	192	(1)
Useful Resources for Consumers	192	(1)
``What Do You Think'' Questions	193	(1)
Appendix Issue 7-A: The Life Cycle and Permanent Income Hypotheses	193	(3)
Life Cycle Hypothesis	193	(1)
Permanent Income Hypothesis	194	(1)
Shortcomings of Models	194	(2)
Consumers in the Global Marketplace	196	(26)
World Economic Problems	196	(6)
Economic Problem: Excessive Population Growth	197	(1)
Economic Problem: Damaging Pollution	198	(1)
Economic Problem: Crime, Corruption and Anarchy	199	(1)
Economic Insight: Capital Flight Hurts Developing Countries	199	(1)
Economic Problem: Income Inequality	199	(1)
Economic Problem: Persistent Poverty	200	(1)
Economic Problem: Excessive Military Spending	200	(1)
Economic Problem: Growing External Debt	200	(1)
Economic Insight: Developing Countries Make Good Trading Partners	201	(1)
Economic Problem: Market Reforms	201	(1)
Key Economic Concepts in Global Trade	202	(3)
Pareto Efficiency: Economic Trade is a ``Win-Win'' Situation	202	(1)
Economies of Scale	202	(1)
Absolute Advantage	202	(1)
Comparative Advantage	203	(1)
An Economic Focus: The Consumer Interest in International Trade	203	(2)
Globalization and the United States	205	(4)
Criticisms of Globalization	206	(1)
Economic Insight: The U.S. Exports ``Its Values'' Around the World	206	(3)
Benefits of Globalization
The Future of Trade and Globalization
Free Trade	209	(4)
The Benefits of Free Trade	209	(1)
Some Barriers to Free Trade	210	(1)
An Economic Focus On...How the Supply of and Demand for Labor Affect Wage Rates in Developing Countries	211	(1)
The Results of Protectionism	212	(1)
U.S. Industrial Policy of Managed Trade	213	(1)
Economic Insight: Cartels Overcharge Consumers	214
Regional Trade Agreements and the World Trade Organization	213	(3)
North American Free Trade Agreement	214	(1)
European Union	214	(1)
Did You Know? Consumer Protections Threatened by Trade Agreements	215	(1)
The World Trade Organization	215	(1)
The International Consumer Movement	216	(4)
Consumers International	216	(1)
Consumers International is a Strong Voice for Consumers	217	(1)
Consumers in Developing Countries are at Risk to the ``Dark Side'' of Marketing Consumers International Seeks Social Justice and Fairness	218	(1)
Consumers International Seeks Social Justice and Fairness	218	(1)
United Nations Guidelines on Consumer Protection	218	(1)
An Economic Focus: China's Consumer Movement	219	(1)
Review and Summary of Key Terms and Concepts	220	(1)
Useful Resources for Consumers	221	(1)
``What Do You Think'' Questions	222	(1)
Government Regulation of Economic Interests	222	(24)
The Economic Role of Business in Society	222	(2)
Why Businesses Operate as They Do	223	(1)
Social Responsibilities of Business	223	(1)
Self-Regulation is Essential to Good Business Practices	224	(2)
Purposes of Self-Regulation	224	(1)
Examples of Self-Regulation	225	(1)
Chambers of Commerce	225	(1)
Better Business Bureaus	225	(1)
Standards-Setting Organizations	226
Advertising Self-Regulation	225	(1)
Other Trade Associations	226	(1)
Why Governments Regulate	226	(8)
Economic Insight: Why Government Takes on So Many Jobs	226	(1)
Government Attempts to Create External Benefits	227	(1)
Consumer Update: Some Things that Government Does Right!	228	(1)
Economic Insight: The Costs of Government Regulation are Paid by Consumers	229	(1)
Governments Encourage or Discourage Certain Behaviors	229	(1)
When is it Desirable for Government to Control the Market?	229	(1)
Utility Companies are Regulated by Government	230	(1)
Public Utility Commissions Regulate Utility Companies	230	(1)
Deregulation of Companies	230	(1)
An Economic Focus On...Large-Scale Production and Price Regulation	231	(2)
Economic Insight: The Historical Culture of U.S. Government Regulation	233	(1)
The Effects of Little or No Competition are Economic Fraud	234	(4)
Government Sometimes Prohibits Competition	234	(1)
Agricultural Marketing Orders and Cooperatives	235	(1)
Economic Insight: Top Ten Corporate Price-Fixers	235	(1)
Economic Insight: A Dozen Ways Big Business Gets Government to Help Them Overcharge Consumers	236	(1)
Profit Protections for Farmers and Ranchers	236	(1)
Government's ``Too-big-to-fail'' Doctrine	237	(1)
Exemptions from Antitrust Laws
Protection for the Insurance Industry	237	(1)
Government Gets Businesses to Sign Consent Agreements	237	(1)
Government Laws Against Illegal Business Practices	238	(6)
Antitrust Laws	238	(1)
Unreasonable Methods of Monopolizing Behavior	239	(1)
Illegal Business Practices	239	(1)
Economic Concentration	240	(1)
Large Mergers	241	(2)
Unfair Methods, Acts and Deceptive Practices	243	(1)
Price Discrimination	243	(1)
Economic Insight: Antitrust Tools to Promote Fair Competition	243	(1)
Review and Summary of Key Terms and Concepts	244	(1)
Useful Resources for Consumers	245	(1)
``What Do You Think'' Questions	245	(1)
Government Regulation of Consumer Interests	246	(18)
Special-Interest Groups and Government Regulation	246	(2)
Lobbyists are Important to Effective Government	247	(1)
Consumers Have Lobbying Organizations	247	(1)
Regulations are Negotiated	248	(1)
How Governments Regulate	248	(6)
Administrative Agencies: The ``Fourth'' Branch of Government	249	(1)
Executive (Dependent) and Independent Agencies	249	(1)
Powers of Regulatory Agencies	250	(1)
Investigative Power	250	(1)
Quasi-legislative Power: Rulemaking Authority	250	(1)
Informal Rulemaking	250	(1)
Formal Rulemaking	251	(1)
Quasi-Judicial Power	251	(1)
Agencies with All the Powers	251	(1)
Did You Know? Consumers Sometimes Lack ``Standing'' to Sue	252	(1)
State and Local Government Consumer Protection	252	(1)
States Follow One of Four Legal Approaches	253	(1)
Unconscionability	253	(1)
State Attorneys General and Consumer Problems	253	(1)
Office of Consumer Affairs	253	(1)
Weights and Measures Offices	254	(1)
Consumer Watchdogs on Public Boards	254	(1)
How Lawmakers Strengthen Consumer Protection Laws or Undercut and Weaken Them	254	(1)
Federal Trade Commission Powers	255	(2)
Quasi-Judicial Powers	256	(1)
Quasi-Legislative Powers	257	(1)
Benefits and Costs of Government Regulation	257	(1)
Benefit-Cost Analysis is a Tool	258	(1)
Specification and Performance Standards	259	(1)
Sources of Regulatory Inadequacy	259	(1)
Review and Summary of Key Terms and Concepts	260	(1)
Useful Resources for Consumers	261	(1)
``What Do You Think'' Questions	262	(2)
Part Four: Information Processing
Policymaking and Consumer Issues	264	(24)
Policymaking in the United States	264	(4)
Power Clusters	265	(1)
Attentive Public and Latent Public	265	(1)
How Public Policy is Shaped	266	(1)
Power Cluster Behavior	266	(1)
Money, Power and the Status Quo	266	(2)
Do Big Corporations Own American Politics?
PAC Support for Democrats and Republicans	268	(1)
How Government Helps Resolve Public Policy Disputes	268	(3)
Government's Political Biases	268	(1)
Government Makes Public Policy Decisions	269	(1)
Government Resolves Public Interest Disputes	269	(2)
Economic Idealogy and Political Beliefs	271	(8)
The Neoclassical Belief System
The Managerial Belief System	273	(1)
The Reformist Belief System	274	(1)
Political Belief Systems	274	(1)
Conservatism	275	(1)
Liberalism	275	(1)
Political Party Beliefs	276	(1)
Consumer Update: Humorist P.J. O'Rourke on Democrats and Republicans	277	(1)
What are Your Economic and Political Belief Systms?	278	(1)
Consumer Update: Communitarian: A Political Ideology Between Conservatism and Liberalism	279	(1)
Support for Consumer Protection Proposals	279	(1)
Analyzing and Resolving Consumer Issues	280	(2)
Constructive Thinking	280	(1)
Purposeful Analytical Thinking	281	(1)
Preparing Alternative Solutions	281	(1)
Government Action in Creating Solutions	282	(1)
Consumer Update: How to Successfully Move a Consumer Issue Forward	282	(2)
Lobbying the Government Decision-making Process	283	(1)
The Legislative Process	283	(1)
Know Your Lawmakers	283	(1)
Know Your Issue	284	(1)
Resolution Through Cooperation	284	(1)
Review and Summary of Key Terms and Concepts	285	(1)
Useful Resources for Consumers	285	(1)
``What Do You Think'' Questions	286	(1)
Appendix Issue 11-A: Proposed Consumer Protection Laws	287	(1)
Decision-making	288	(25)
Reasons Why Decision-making is Difficult	288	(9)
Consumers Search for Value	289	(1)
Numbers and Complexities of Products
Consumer Update: Buy Textbooks on the Internet	290	(1)
Consumers Follow Rules of Thumb	290	(1)
Irrational Marketplace Decisions	290	(1)
Style Over Substance	290	(1)
Consumers Ignore the Discount Rate	291	(1)
Payoffs from Information Processing	292	(1)
Price Discrimination is Good for Informed Consumers	292	(1)
Did You Know? Frequent-Buyer Loyalty Programs	292	(1)
Decision-making Time is Limited	293	(1)
Searching and Comparison Shopping	293	(1)
Key Topic in Consumer Economics: Advertising Dollars Censor Consumer Access to Information	293	(1)
Good Buys and Best Buys	294	(1)
An Economic Focus On...Information Search in the Buying Process	294	(2)
Key Topic in Consumer Economics: Poor Consumers are Disadvantaged in the Marketplace	296	(1)
Lifestyles, Values and Decision-making	296	(1)
Geistfeld Model of Consumer Choice	297	(6)
Indifference Curves	297	(1)
Budget Constraint	298	(1)
Maximizing Satisfaction	299	(1)
Purchasing With Inadequate Information	300	(1)
Consumers Need Two Types of Information	301	(1)
First Need---Budget Constraint Information	301	(1)
Second Need---Indifference Curve Information	302	(1)
A Concluding Comment on Consumer Choice	303	(1)
Consumers Often are Pro-environment	303	(4)
Consumer Update: On the Difference Between an Environmentalist and a Consumer Advocate	304	(1)
Green Labeling	304	(1)
Consumer Update: Coalition for Environmentally Responsible Economies	305	(1)
Free Riders and Pollution	305	(1)
Public Goods	305	(1)
Public Bads	306	(1)
Ways of Controlling Negative Externalities	306	(1)
Consumer Update: Global Warming and the Asian Brown Cloud	307	(1)
Advertising Truth to Consumers	307	(4)
Consumer Update: Products With the Largest Advertising Expenses	308	(1)
Types of Truth in Advertising	308	(2)
Issue for Debate: Top-Ten Corporations Caught Lying in False Advertising	310
Advertising Directed at Children	309	(1)
Marketing to Children	310	(1)
Advertising to Captive Schoolchildren	311	(1)
Review and Summary of Key Terms and Concepts	311	(2)
Useful Resources for Consumers
``What Do You Think'' Questions
The Planned Buying Process	313	(27)
General Buying Behaviors of Consumers	313	(4)
Habit Buying	313	(1)
Impulse Buying	314	(1)
Key Consumer Economic Insight: The Shopping Scene	314	(1)
Conspicuous Consumption	314	(3)
Issue for Debate: Americans Should Reject Materialism
Planned Buying for Important Purchases
Did You Know? Life Expectancy of Consumer Products	317	(1)
Sources of Buying Information for Consumers	318	(2)
Consumer Reports Magazine	318	(1)
Other Sources	319	(1)
Economic Insight: Judging Quality with Brand Names, Store Brands and Generic Brands	320	(1)
Defining the Problem in the Context of Your Needs and Wants	320	(2)
Can Bonnie Afford to Buy an Automobile?	321	(1)
How Much Automobile Can Bonnie Get for Her Money?	321	(1)
Used Car Prices	322	(1)
Identifying Possible Alternatives	322	(2)
Key Topic in Consumer Economics: Dealer Ploys to Get You to Pay More Money	323	(1)
Key Topic in Consumer Economics: Auto Safety Ratings and Repair Cost Estimates	324	(1)
Comparing Choices	324	(7)
Secret Warranties Exist	326	(1)
Key Topic in Consumer Economics: Take the Cash Rebate or a Low-Interest Loan?	327	(1)
Key Topic Insight: Weak Automobile Bumpers	327	(1)
Did You Know? How Much Does It Cost to Drive?	328
Service Contracts and Extended Warranties are Bad Deals	326	(3)
Leasing is a Good Choice for Some Consumers	329	(1)
Financing Options	330	(1)
Establishing Priorities	330	(1)
Negotiating	331	(3)
The Goal of Negotiation	331	(1)
Negotiating Price	332	(1)
Key Topic in Consumer Economics: False Auto Price Advertising	332	(2)
Haggle, Use One-Price Shopping or a Buying Service	334	(1)
Selecting, Accepting and Evaluating	334	(2)
Key Topic in Consumer Economics: Tips on Buying a Used Vehicle	335	(1)
Review and Summary of Key Terms and Concepts	336	(1)
Useful Resources for Consumers	337	(1)
``What Do You Think'' Questions	337	(3)
Part Five: Consumer Economic Issues
Food Issues	340	(21)
American Eating Habits	340	(8)
Key Topic in Consumer Economics: Why Learn About Food and Health?	341	(1)
About Food and Health?	341	(1)
Calorie Intake and Weight	341	(1)
The Poor Quality of American Diets	342	(1)
Consumer Update: Advertising Food to Kids on Television	343	(1)
Scientific Evidence Links Diet to Disease	343	(1)
Good Nutrition and Good Health	344	(1)
Key Topic in Consumer Economics: The Poor Pay More for Food	344	(1)
The Importance of Low-Fat Eating to Good Health	344	(1)
Consumer Update: Unhealthy Theater Popcorn	345	(1)
Issue for Debate: Food Health Claims Should be Better Regulated
Healthy Eating is Not Difficult	345	(1)
Nutritional Labeling and Education Act	346	(2)
USDA's Food Guide Pyramid	348	(1)
Agencies and Laws that Protect Food Consumers	348	(8)
U.S. Department of Agriculture	348	(1)
Consumer Update: How Good is Food Safety in the United States?	349	(1)
Food and Drug Administration	349	(1)
Issue for Debate: Genetically Engineered Food Products Should be Labeled as Such	350	(1)
Food Additives	351	(1)
Intentional and Incidental Additives	352	(1)
The GRAS List	352	(1)
Sulfites in Foods	352	(1)
Pesticides in Foods	353	(1)
Sweeteners	353	(1)
Food Preservatives	354	(1)
Organic Food Labeling	354	(1)
Research Conducted on Animals	355	(1)
Research and a Risk-Free Society	355	(1)
Anti-Competitive Practices in the Food Industry	356	(1)
Agreements that Squeeze Out Competitors	356	(1)
Agricultural Marketing Orders	356	(1)
Economic Concentration in the Meat Packing Industry	357	(1)
Questionable and Confusing Food Selling Practices	357	(2)
Review and Summary of Key Terms and Concepts	359	(1)
Useful Resources for Consumers	360	(1)
``What Do You Think'' Questions	360	(1)
Health Care Issues	361	(25)
The Challenges of Purchasing Health Care Services	363
Did You Know? Life Expectancies in Years
Guidelines on How to Purchase Services	361	(2)
Did You Know? Questions to Ask Your Health Care Provider
The Bruised and Broken U.S. Health Care System	363	(6)
Highest Health Costs in the World	364	(2)
The Insured and the Uninsured	366	(1)
Young People Overpay	367
Why Health Care Reform Always Fails	366	(1)
Reform is Difficult	367	(2)
Consumer Update: Medical Privacy Protections
Reform Proposals
Medical Malpractice Damages
The Medical Care Market Has Characteristics That Make It Difficult to Reform
Consumer Update: Toxic Shock Syndrome	369	(1)
Prescription and Over-the-counter Drugs	369	(8)
What are Drugs?	370	(1)
Pre-market Review of Prescription Drugs	370	(1)
Prescription Drugs Cost Lots More in the United States	371	(1)
Generic Drugs	372	(1)
Problems and Dangers of OTC Drugs	372	(1)
Aspirin and Similar Pain Relievers	373	(2)
The Main OTC Pain Relievers
Consumer Update: Advertising Drugs: Illegal, Unethical or Both
Dietary Supplements: Lies and Dangers	375	(2)
Smoking and Health	377	(5)
Ugly Health Links of Smoking	377	(1)
Smoking and Death	378	(1)
Secondhand Smoke Kills 40,000+ Every Year	378	(1)
Issue for Debate: Government Should Encourage Americans to Have Better Diets and Do Less Smoking and Drinking	379	(1)
Tobacco Executives Told the Worst Lies in History	379	(1)
The Future	380	(1)
Issue for Debate: Raise Cigarette Taxes to Discourage Consumption	381	(1)
Alcohol and Health	382	(2)
Key Topic in Consumer Economics: Why Do Some People Persist in Harming their Health?	382	(2)
Review and Summary of Key Terms and Concepts	384	(1)
Useful Resources for Consumers	384	(1)
``What Do You Think'' Questions	385	(1)
Product Safety Issues	386	(27)
Product Safety and Effectiveness	386	(3)
Many Products Cause Injuries	387	(1)
Did You Know? Toy Safety Recommendations for Gift Givers	387	(1)
Causal Factors in Injuries	388	(1)
Consumer Update: Top Ten Sellers of Unsafe Products	388	(1)
Benefit-Cost Analysis and Safety	389	(3)
How Much Risk is Acceptable?	390	(1)
Did You Know? General Motors' Price on Fire Deaths Used to be $2.40	390	(1)
Measuring Risk for Public-Policy Decisions	391	(1)
Factors to Consider in Making Product Safety Decisions	391	(1)
Consumer Update: Responsibilities of Consumers in Product Safety	392	(1)
The Consumer Product Safety Commission	392	(6)
CPSC Legal Mandates and Responsibilities	393	(1)
CPSC Authorities and Powers	393	(2)
CPSC Injury Data-Collection System	395	(1)
CPSC Rulemaking Procedures	395	(1)
CPSC Rulemaking Authority	396	(1)
Certain Factors Must be Considered in CPSC Rulemaking	396	(1)
Needed Consumer Product Safety Regulations	397	(1)
The National Highway Traffic Safety Administration	398	(6)
NHTSA Legal Mandates and Authorities	398	(1)
Did You Know? Vehicle Death Rates	399	(1)
Consumer Update: Bridgestone-Firestone Tires/Ford Explorer SUV Tire Blowouts Scandal Shows that NHTSA Needs More Powers to Police the Market	399	(1)
NHTSA Mandates	400	(1)
NHTSA Recalls	400	(1)
Consumer Update: Vehicle Rollover Risk Ratings	401	(1)
NHTSA Vehicle Crashing and Testing	402	(1)
NHTSA Safety Standards	402	(1)
Issue for Debate: The U.S. Should Require Daytime Running Lights on Vehicles
Air Bag Safety	402	(1)
Issue for Debate: Motorcycle Safety Helmets Should be Mandatory	403	(1)
Needed Vehicle Safety Regulations	403	(1)
Issue for Debate: SUVs Should be Efficient or Taxed, Just Like Automobiles	404	(1)
Criticisms of Government Product Safety Efforts	404	(1)
Product Liability Lawsuits---A Powerful Weapon of Consumers---Under Assault by Conservatives	405	(6)
Punitive Damages Penalize Only the Worst Behavior	406	(1)
Did You Know? Silicone Breast Implant Lawsuit	407	(1)
Today's Product Liability Laws Protect Consumers	407	(1)
Consumer Update: Top Ten Product Liability Lawsuits	408	(1)
Criticism of Product Liability Lawsuits is Unwarranted	408	(2)
Issue for Debate: Sealed Court Records by Greedy Corporations Should be Prohibited by Law	410	(1)
Review and Summary of Key Terms and Concepts	411	(1)
Useful Resources for Consumers	411	(1)
``What Do You Think'' Questions	412	(1)
Banking, Credit and Housing Issues	413	(30)
Banking Problems and Issues	413	(5)
Rising Bank Fees	413	(1)
Ugly Fees and Penalties for Bouncing Checks	414	(1)
Overdraft Protection Fees	414	(1)
Banks Hate Credit Unions	414	(1)
Truth in Savings Law	415	(1)
The Savings and Loan Scandal	415	(1)
Deregulation of Banking is Hard on Consumers	416	(1)
The Need for Basic Banking	417
The Unbanked	416	(1)
Key Topic in Consumer Economics: The Poor Pay More for All Financial Services	417	(1)
Credit Problems and Issues	418	(13)
Aggressive Credit-Card Solicitations	418	(2)
Buying on Credit is a Negative Sale	420	(1)
Late Fees, Penalty Interest Rates and Overcharges	420	(1)
Consumer Update: Top Ten Greedy Credit Card Companies	421	(2)
Paying Only the ``Low Minimum Monthly Payment''	423	(1)
Did You Know? Bad Credit Boosts Insurance Costs	423	(1)
Grace Period Rip-offs	423	(2)
Two-Cycle Method Rip-off	425	(1)
An Economic Focus On...Usury Laws and the Supply and Demand for Consumer Credit	425	(3)
Consumer Update: Consolidate Student Loans	428
Card Blocking May Create Penalties	427	(1)
The Rule of 78s Prepayment Penalty	428	(2)
Mistakes in Credit Files
Consumer Update: Bad Credit Records Plague Consumers, Especially African-Americans
Did You Know? Alternatives for Getting Out of Debt	430
New Bankruptcy Law	429	(2)
Housing Problems and Issues	431	(9)
The High Cost of Housing in America	431	(1)
Did You Know? Housing Subsidies for the Poor and Some Recent College Graduates	432	(1)
Predatory Lending	432	(1)
Discrimination in Credit, Housing and Insurance	433	(1)
Consumer Update: Examples of Discrimination	434	(1)
Did You Know? How to Report Credit Discrimination	435	(1)
Redlining Discriminates	435	(1)
Consumer Update: Community Reinvestment Act Ratings	436	(1)
Appraisers Are Regulated, but Not for Average Consumers	436	(1)
Mandatory Defect-Disclosure Laws	436	(1)
Agents Should Disclose to Buyers Whom They Represent	437	(1)
Bargaining is Necessary to Reduce Sales Commissions	437	(3)
Kickback Fees and Up-charges	440	(1)
An Economic Focus On...The Supply and Demand for Housing
Escrow Rip-offs	440	(1)
Review and Summary of Key Terms and Concepts	440	(1)
Useful Resources for Consumers	441	(1)
``What Do You Think'' Questions	442	(1)
Insurance and Investment Issues	443	(22)
Consumer Problems and Issues in Insurance	443	(10)
Consumer Rights in Insurance	443	(1)
Did You Know? Insurance Company Don'ts	444	(1)
Insurance is a Profitable Industry	444	(1)
Noncompetitive, Poorly Regulated Insurance Industry	444	(1)
No Federal Regulation	444	(1)
State-approved Price-fixing	445	(1)
Price-fixing with Anti-group and Anti-rebate Laws	445	(1)
Collusion Between Insurance Companies and Auto Repair Shops	445	(1)
Poor State Regulation Means High Prices	446	(1)
Consumers Go Online to Buy Insurance for Less	446	(1)
Reforms for the Auto Insurance Industry	447	(1)
No-fault Insurance	447	(1)
Benefits of No-Fault Insurance	447	(1)
Michigan No-Fault Insurance	447	(1)
Pay-at-the-Pump No-Fault Insurance	447	(1)
``No Pay, No Play'' Insurance	447	(1)
Pay-per Mile Auto Insurance	447	(4)
Beware of Life Insurance Being ``Sold'' as a Retirement Plan	451	(1)
Tips for Buying Life Insurance	451	(1)
Title Insurance for Homes-A Rip-off	452	(1)
When Insurance Companies Go Broke	452	(1)
Consumer Update: Clue Reports on Homes	453	(1)
Consumer Problems and Issues in Investments	453	(10)
Investor Rights	453	(1)
Fraud and Thievery in Corporate America
Consumer Update: Top Ten Corporations Caught Lying to Investors	454	(1)
Most Financial Advisors are Biased	454	(3)
All Bank Investments are Not Insured	457	(1)
Arbitration Means Giving Up Your Right to Sue
Retirement Plans at Risk	458	(1)
Types of Retirement Plans	458	(2)
Many Risks Exist
Did You Know? Divorced Women's Right to Ex-husband's Pension	460	(1)
Consumer Update: Estimate Your Retirement Needs	461	(1)
Timeshares are Not Investments	462	(1)
Review and Summary of Key Terms and Concepts	463	(1)
Useful Resources for Consumers	464	(1)
``What Do You Think'' Questions	465	(1)
Appendix: Careers in Consumer Affairs	465
Career Opportunities in Consumer Affairs	465
Job Responsibilities	465	(1)
Career Development Opportunities	466	(1)
Entry-level Job Titles in Consumer Affairs	466	(1)
Entry-level Employers of Consumer Affairs Graduates	466	(1)
Lifelong Career-Development Opportunities	466	(1)
Career Options	466	(1)
Jobs in Business	467	(1)
Jobs in State and Local Government	467	(1)
Jobs with the Federal Government	467	(1)
Jobs in Federal Offices in Local Communities	467	(1)
Jobs in Consumer and Public Interest Organizations	467	(1)
Curriculum Requirements	467	(1)
Competencies of Graduates	468	(1)
Sample Letters for Employment	468