CONTEMPORARY ECONOMICS© Thomson South-Western 20.3Consumer Protection Explain why consumers need...

CONTEMPORARY ECONOMICS © Thomson South-Western

20.3 Consumer Protection

Explain why consumers need the government to protect them from defective or dangerous products.

Understand how you can take responsibility for your own protection as a consumer.

Know how to protect yourself from identity theft and what to do if your identity is stolen.

Objectives


20.3 Consumer Protection

Food and Drug Administration (FDA) Federal Trade Commission (FTC) cease and desist order Consumer Product Safety Commission (CPSC) Environmental Protection Agency (EPA) identity theft

Key Terms

20.3 Consumer Protection SLIDE

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Government Efforts to Protect Consumers

Most consumers rely on manufacturers to be responsible and on the government to set quality and safety standards to protect them from harm.

The government intervenes in the market in an effort to protect consumers from dishonest or careless producers.


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The Pure Food And Drug Act

The Pure Food and Drug Act (1906)Food, Drug, and Cosmetic Act (1938)Food and Drug Administration (FDA)—

federal agency that sets standards for foods and drugs produced or sold in the United States


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The Federal Trade Commission

Federal Trade Commission Act (1914) Federal Trade Commission (FTC)—

government agency that ensures that businesses compete and market their products fairly and honestly Enforces antitrust laws Sets standards for product packaging and labeling

and honesty in advertising Cease and desist order is an FTC-issued directive

to stop a firm making a false or misleading advertising claim.


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The Consumer Product Safety Commission

Consumer Product Safety Commission (CPSC)—federal agency created to protect consumers from dangerous products they might purchase or use


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Number of CPSC-Ordered Recalls in the Month of April, 2000–2006

Figure 20.3


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The Environmental Protection Agency

Environmental Protection Agency (EPA)—federal agency that interprets and enforces laws passed by Congress that involve the environment


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Other Government Protections

Other federal agencies Many other federal agencies are responsible for

protecting consumers in other ways. These agencies are designed to provide a degree of

safety to consumers they could not reasonably be expected to achieve on their own.

State and local protection All state and many local governments also have

agencies that are responsible for protecting consumers.


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Take Responsibility for Your Own Protection

Understand consumer rights and responsibilities

Use common sense


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Dealing with Identity Theft

Identity theft—a crime in which one person fraudulently uses another’s identity to obtain credit or to access financial accounts

Protect yourself from identity theft Know what to do if your identity is stolen

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