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Home , Consumer education, Education economics

CALIFORNIA STATE , NORTHRIDGE

CONSUMER : A MANDATORY COURSE IN II HIGH CURRICULUMS?

A thesis submitted in partial satisfaction of the requirements for the degree of Master of Science in Home by Auda Marie Tatum ,./

January, 1979 The Thesis of Auda Marie Tatum is approved:

uise B. Sutton, Chairperson

California State University, Northridge

ii To my children, Steve, Bob, and Susan, who shared me with California State University for so many years, and who are as proud as I of my academic accomplishments.

iii ACKNOWLEDGMENTS

For her devotion of time, for her patient and tactful guidance during this study, and for her wealth of -~ ideas, I wish to express my sincere appreciation and thanks to Mrs. Louise B. Sutton, Assistant Professor of . For the sharing of her expertise in the area of

Consumer Education, I wish to thank Ms. Betty J. Bailey, Associate Professor of Home Economics. For her understanding and her encouraging sugges­ tions when I felt like giving up, I express my gratitude to Dr. Marjory L. Joseph, Professor and Chairperson of the Home Economics Department. Appreciation is extended to the students at Newbury Park High School who cooperated in the research for this study. Appreciation is also extended to all teachers at Newbury Park High School who assisted in the research for this study.

iv TABLE OF CONTENTS

DEDICATION . . . iii ACKNOWLEDGMENTS iv LIST OF TABLES vi ABSTRACT . . . . vii Chapter I. INTRODUCTION 1 The Problem ...... 2 Justification of the Study . . . 3 Objective of the Study ...... 4 Purpose of the Study ...... 4 Assumptions ...... 5 Limitations ...... 5 Definition of Terms . . . . 6

II. REVIEW OF LITERATURE 7 III. METHODS OF INVESTIGATION 29

S~lection of the Sample ...... 29 Curriculum Outline for Consumer Education . 30 The Posttest ...... 30 Presentation of Data . . . 31

IV. ANALYSIS AND INTERPRETATION OF FINDINGS 32

Description of Respondents 32 Identification of Groups 32 Response Analysis . 33

V. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 40

Summary . . . . . 40 Conclusions . . . 41 Recommendations . 43

B1BLIOGRi\PfiY 44

APPENDIX . . 48

v LIST OF TABLES

1. Automobiles and Automobile . . . 33 2. Credit, Loans, and Lending Institutions .... 34 3. Banking and Insurance 35 4. Frauds, Swindles, and Consumer Law . 37 5 . Foods and the Supermarket 38

vi ABSTRACT

CONSUMER EDUCATION: A MANDATORY COURSE IN HIGH SCHOOL CURRICULUMS? by Auda Marie Tatum Master of Science in Home Economics

This study was designed to measure the difference in consumer knowledge between a group of students who had instruction in Consumer Education and a group of students who had not had such instruction. Results would provide a basis for proposing a curriculum change to mandate Consumer Education for graduation from Newbury Park High School in the Conejo Valley Unified School District.

Respondents were 87 Newbury Park High School stu­ dents, some who had taken a class in Consumer Education and some who had not. Data were collected by means of a researcher pre­ pared posttest, administered in similar classroom atmos­ pheres by four credentialed instructors.

vii A notable difference in consumer knowledge was ascertained between the two groups of student respondents. Recommendations included: a Consumer Education class be mandatory for graduation from Newbury Park High School, a program for advertising the class be conducted to help students understand what consumer: education is, and students and parents be informed that district requirements currently being formulated for graduating high school seniors include proficiencies in the areas incorporated in Consumer Education.

viii CHAPTER I

INTRODUCTION

Consumers buy, sell, and trade. In 1976, spent, after taxes, a staggering 1,106 billion dollars, or an average of over $5,141 for every person in the (5: 75-76). In the expansible of the United States, the task of being a rational and an informed con­ sumer has become complex. Advertising not only causes people to be dissatisfied with what they already have, but, in addition, it bombards consumers with slogans bearing subtleties only a psychologist can understand (18:4,6). Wise buymanship in this decade demands the talents of a chemist, a dietitian, a real estate broker, and a financier, to mention only a few. When the consumer falls prey to poor workmanship and to fraud, another maze is his to solve as he seeks consumer recourse. The situation in the ­ place is generally viewed as a balance between "caveat emptor"--"let the buyer beware," and "caveat venditor"-­ "let the seller beware." Educators should make a concen­ trated effort to prepare the consumer to function in this environment.

1 2

The Problem Today's consumer requires a large variety of infor­ mation to meet successfully the demands of the marketplace. There is much information available, but many who need it are not getting it, for a multiplicity of reasons. A pro­ gram for effective dissemination of consumer information is needed. Currently in the public school system, courses such as "Family Survival," "Independent Living," "Dollars and Sense," or "Senior Home Economics" are designed to explore some of the consumer problems which the newly launched graduate will encounter. However, in many these courses are electives, and only a small percentage of high school students benefit from the information presented. If one of the goals of educators is to prepare stu­ dents for a role in society, then it was believed that the importance of a course in Consumer Education needed to be examined. For this study a posttest was designed.which was given to students who had taken a Consumer Education class and to students who had not taken such a class. The post­ test sought to measure practical, everyday knowledge with which consumers frequently must deal; The results should indicate if those who have been exposed to such information were better prepared to function in the marketplace of today's society. 3

The purpose of this study, then, was to determine the of a course in Consumer Education.

Justification of the_~_tudy This study was designed to trace the evolvement of Consumer Education programs in the public school system. The historical review should give a chronological picture of the progress of Consumer Education programs since the turn of the century. Legislation during the past 70 years has played an important part in the development and promo­ tion of Home Economics programs. Monies funded specifically for the development of Consumer Education programs have been granted by the federal government. This study related pro­ grams currently in progress and restated and examined Part F of the Act as well as the new funding programs under Subpart 5 of the 1976 amendments of the same act. The results obtained from the posttest were used to identify the need for Consumer Education classes in the high schools. In some states, as well as in some counties in this state, Consumer Education courses are mandatory in the high school curriculum. San Bernardino County, California's largest county, adopted such a policy earlier in this decade. Because of the recognized need for consumer knowl­ edge in today's marketplace, this study was important for 4

identifying the specific need for consumer knowledge and information among high school students. The study indicated areas of weakness in the current Consumer Education classes at Newbury Park High School, and provided direction for improvement of the program. The information from the study will be helpful for educators presently involved in Consumer Education programs, since the role of being a consumer is a continuing aspect of today's life style. The results could help policy makers in the West Valley and in the coastal areas to become aware of the value of such education.

Objective of the Study The objective of this study was to determine whether students who had studied Consumer Education were better

equipped to meet the challenges of the marketplace, wer~ better able to make cogent decisions about financial expen­ ditures, and were better able to make practical application of their acquired knowledge in everyday situations, than students who had no instruction in Consumer Education.

Purpose of the Study The study was developed to gain an awareness of consumer knowledge among high school students at Newbury Park High School in the Conejo Valley Unified School Dis­ trict. It should show if there was a difference in con­ sumer knowledge between a group of students who had taken 5 a class in Consumer Education and a group of students who had never had such a class. One goal of the study was to show the lack of con­ sumer knowledge in present day society. A second goal was to show that the group who had taken a class in Consumer Education was better fitted to function as literate con­ sumers. If both goals were attained, a recommendation for making a course in Consumer Education a mandatory graduation requirement would be made.

Assumptions A class in Consumer Education would improve the knowledge of buymanship skills, and would equip the student with information which he could use to function more effec­ tively in the marketplace. It was assumed that most students would be motivated to learn, because such information would relate directly to their quality of living when they are "on their own." It was further assumed that the posttest was a valid measuring tool for assessing student learning of con­ cepts taught 1n Consumer Education classes at Newbury Park High School.

Limitations The results and conclusions in this study have been limited to Newbury Park High School, a high school of approximately three thousand students. This should present 6

a cross section of students in this geographic area, but information obtained might not be representative of other areas. Because Newbury Park High School students may be typical of students in other areas, the results obtained should not be discounted because of the area limitation. The degree of seriousness with which students applied themselves when answering the posttest situations could be influenced by the attitude and enthusiasm of the teachers administering the test.

Definition of Terms Consumer. "A person or thing that consumes; a person who buys or services for his own needs and not for resale or to use in the production of other goods for resale" (12:306). . "The practice and policies of pro­ tecting the consumer by making him aware of defective and unsafe products, misleading business practices; the act of consuming" (12:306). Free enterprise capitalism. An economy where the wealth, production, distribution, and exchange of goods are entrusted to and effected by private enterprise and control under competitive conditions with a minimum of government control. CHAPTER II

REVIEW OF LITERATURE

Since President John F. Kennedy set forth the rights of consumers in the 1960's, increasing has been given to the plight of consumers in the United States. A.n interwoven complexity of advertising techniques, sophis­ ticated products, marketing strategies, and seller outlets exists with which consumers must learn to deal. This com­ plexity, which is called the marketplace, is a constantly changing entity. In the last one hundred years, the United States has undergone a transition from a rural society to an urban one. In 1850, approximately 85 percent of American society lived in what \'las known as "rural America." One hundred years later, approximately 89 percent of the populace was inside city limits (25:7). One might ask after hearing that statement, "Are the other 11 percent really living in the country?" A second change in the past century has been the l~ited States' evolvement from ~closed to an open society. Travel, communicatibn, occupational and religious mobilities, politics, and economics are now on a wider scale than pre­ viously. Talcott Parsons (2:7) as quoted by Walter ThomasF

7 8 estimated that "the average American one hundred years ago knew seventy-five people." Current semanticists estimate the

average American today knows at least two thousand people by

first and last names and at least another two thousand by some identification like "Ho Chi Minh in North Viet Nam."

A third change has been from small institutions to large ones. Rare indeed is the country school with one or two teachers. Now the practice is to bus children many miles to one central educational complex (27:8).

A fourth change has been from a limited education society to a liberal education society. Education is now more than learning a skill or making a living; the concern now is with economics, politics, psychology, sociology, and world affairs (27:8).

Another gradual change has been from labor to leisure. One hundred years ago, the average American worked

72 hours per week, while today he is working 34 to 36 hours per week. It takes less time now to make the he needs to spend (27:8).

Business transactions formerly involved neighbor with neighbor. Trade was simple and honesty was prevalent because one lived next door or sat in church with those with whom he did business. Conglomerates and branches, union groups and arbitrators, advertising agencies and government regulators currently produce a business climate which is neither simple, nor is it one to one. With the decline in 9 personal contact has come a decline in honesty in dealings (27:8). An obvious change has been in the area of religion. Society is now more secular than religious. Where the activities of people in the early 1900's revolved around the church, the activities of people in general at this time do not (27:8). A final change to be considered is the one from to abundance. Those who lived in the early part of the century toiled long hours to have food for their families. What are considered necessities now were luxuries to them. People have gone from never having enough to having more than they shall ever use--even education (27:8). Programs concerned with home and family life must not ignore such changes. Plans adopted in the early part of the century may serve as a base or as a springboard, but they will not satisfy the needs of today's student. Families are mobile today, whether they live in cities, suburbs, or rural areas, and they demand a back­ ground for decision making which the relative isolation of the rural economy in the 1900's did not require. Thrusts in a new direction must be made if the programs are to edu­ cate wives and mothers who work outside the home, who are in constant contact with mass media and with new products which must be evaluated, and who meet new problems every day in the marketplace. 10

A new word was coined to cover the vast areas relating to and the consumer. That word was "consumerism." Consumerism was defined as the consumption of , and also the policies of protecting the consumer and creating an awareness of misleading busi­ ness practices and/or unsafe products. Another word which needs to be discussed at this time is "a consumer." A functionally literate "consumer" is able to function capably in the marketplace. In a complex society, this includes many tasks, and even the simplest lives involve a variety of consuming functions: locating and caring for ; buying and preparing food; allocating ; selecting and caring for clothing; using or deciding not to use credit; buying or deciding not to buy insurance, equipment, fur­ nishings, and services of all kinds (26:64). One of the problems faced by today's consumer is how to sort the masses of information to which he is exposed. As the number and variety of products increases, the problem becomes more acute. The inability to determine reliable information could cause consumers to waste money or to buy poor quality goods. Additionally, they might not know how to properly use or to properly care for what they buy. Bom­ barded as they are by mass media advertising, consumers have come to use brands, buying guides, , and their old habits without reassessing their reliability. The consumers 11 rely many times on information provided only by the seller, and do not use other available information. A third problem has been the lack of organization shown by consumers in general. The main reason for the lack of unity may be that "consumption is a function common to all and peculiar to none" (33:36). People are teachers or workers first, and then they are consumers. in consumption are general rather than particular. The need for and the effectiveness of joint effort has not been realized. The unassisted consumer becomes progressively more defenseless (33:36). A study in consumer behavior may reveal some inter­ esting phenomena. The average consumer might automatically upgrade his spending when an increase in income is expected or anticipated. In recent years, personal have risen at rates which tempt increased spending during periods of . Unfortunately, prices rise also. This behav­ ior tends to keep consumers on a treadmill: they must strive for higher incomes in order to maintain their stand­ ard of living in terms of goods and services (22:10).

During depressions~ people tended to hold to the same spending pattern previously in effect. Families with declining incomes seek supplementary income in order to maintain their current standards of living rather than adjust their standards downward (16:68). 12

In a capitalistic society, consumers have much more choice than in any other form of . This freedom to choose results in many a delightful hour spent in shopping. The right to choose also grants the right to make mistakes. Lesser and fleeting wants must be identified by the wise consumer, as they may need to be denied or post­ poned. In only a few instances can individuals satisfy all of their lesser wants without increasing their own . "In spite of all the good advice available, many consumers spend too much of their money in an irresponsible, unthinking manner," says E. Bryant Phillips, author of Consumer Economic Problems (22:54). This spending for unim­ portant trivia necessitates the use of installment credit for the purchase of durable consumer goods. A failure by the consumer to allocate sufficient funds for medical care, housing, and has made it necessary for govern­ ments throughout the world to assume a guardian role over several aspects of consumer (22:54). Studies have been done to determine the influence of peer and primary group pressure on the consumer. The evidence suggested that the consumer does not react auto­ matically to the suggestions he receives but he definitely manipulates them before making his decisions (14:413,428). The most important stimulus to the consumer is input and communication from people he knows. Purchases may increase or decrease because of the exchange of this type 13 of information. Negative communication makes it practically impossible for the market to generate sales for a particular product. "What a consumer does at one time depends on what he has done previously" (14:423). From the problems reviewed, it is evident that the American consumer is in need of some kind of educative pro­ gram which would sharpen his consumer skills. Though some excellent consumer groups have been organized, their main purpose seems to be consumer recourse instead of consumer education. The logical place for such education to occur is in the school system. This idea is not new. There are those who have been pushing such a program since before the 20th century. Home Economics, at first called "domestic economy," was originally advocated by those concerned with the educa­ tion of girls. In the latter part of the 18th century, 150 years after the beginning of education for boys, girls were first admitted to schools for a few hours a day, and only then when boys were not present. Outstanding women through the years have promoted education for girls and have advanced the field of Home . One of the most influential women was a scientist, Mrs. Ellen H. Richards (1842-1911). She was the first woman to be admit­ ted to the Massachusetts Institute of Technology where she became a sanitary chemist and later a member of the faculty. She helped raise money to provide laboratory space for 14 women, and she was the author of several textbooks. Food Materials and Their Adulteration was her first, published in 1885, and it was followed by The Chemistry of Cooking and Cleaning, The Cost of Living, The Cost of Food, The Cost of Shelter, The Art of Right Living, and . Mrs. Richards helped organize the Lake Placid Conferences to consider "some united action on the part of those most interested in home science or economics'' (28: 69-70). The number of schools teaching Home Economics grew rapidly during the later 1800's and early 1900's, and by 1914 it was found that Home Economics was included in school programs in all the states and in "not less than 3500 or more towns and cities" (28:69-70). Between 1905 and 1920, legislatidn played an impor- tant part in the development of the school program in Home Economics. In 1914, eleven states were giving grants-in-aid to promote the program. A job description of homemaking furnished a basis for the kind of program which could be financed by vocational education funds. Homemaking was defined as .a social and business enterprise, the home­ maker as a joint manager who is the purchasing agent, a partner in the business (and usually the business manager). As the supeTintendent of the plant, she plans her own work and that of others, and must be skilled in general housekeeping, in the preparation and serving of food, in the care and rearing of children, and in the care of the family's health. 15

She is the educational manager~ the health and welfare manager, and the social manager of the family group (11;15-16). In 1958, the objective was broadened: to provide . . . instruction which will enable families to improve the quality of their family life through more effective development and utilization of human and rna terial resources (10: 15) . In 1930, Lawrence Frank, a prominent educator, stated that homemaking was "more than a job, more than a profession; it was a way of living'' (9:41-42). His belief was that it required more than vocational proficiency to help young people live intelligently and sanely in the world of the future. Consumer Education has always been included in the Home Economics curriculum of schools, but sometimes it has been so integrated that neither teachers nor students recog- nized it as Consumer Education. To meet the demands of today, Consumer Education must be expanded in scope and made visible as part of Home Economics education programs for both in-school youth and for adults (1:23). As time advances further into the 20th century, the need for Consumer Education has been even more dramatically recognized. The National Association of Principals recognized the imperative need for Consumer Education at one of their conferences (23:1,2). They reflected that in decades past, a person needed a "producer education" in order to perform the multiple .and varied jobs 16 around the home and farm. In today's society, one may be a producer in one main area, but his role as a consumer has become increasingly more complex. He must cope with a myriad of new jobs and services each year, and he must also be aware of the legalities of being a consumer, i.e., con­ tracts, agreements. Products are more complex, and are difficult to evaluate. Problems which arise may cause him to wonder where he can turn for help. The mobile society makes it difficult, if not impos­ sible, for a consumer to become familiar with reputable and honest fi1~s and merchants. The impersonal marketplace intimidates many consumers~ It is hard to determine where to go for help. It is hard to distinguish between reputable and unethical and fraudulent practices in the marketplace. Consumer losses as a result of fraud and deception are esti­ mated to be in the billions of dollars. The Food and Drug Administration conservatively estimates that about $1 bil­ lion is spent annually on worthless and misrepresented quack devices, drugs, foods, and cosmetics. A survey a few years ago by the Arthritis and Rheumatism. Foundation disclosed that "approximately $300 million is spent annually on such worthless arthritis remedies as alfalfa tea, phony 'radia­ tion' treatments, and copper bracelets" (23:2). The Council of Better Business Bureaus stated that in recent years its biggest single source of complaints involved magazine subscription sales. Fraudulent and 1 ~ 1. I deceptive practices in home repairs and improvements were a close second, with appliance repairs following next. Losses in these areas were estimated to be in the billions of dollars. Consumer losses in the sale of new and used cars was a considerable expense to the public though it has been less well documented. Additionally, consumers have sus- tained sizeable losses from fraudulent solicitations for charities, phony land promotions, home study rackets, and numerous other schemes. These practices are costly in money, but more important, they affect the lives and safety of the people defrauded (23:2). It becomes increasingly more important for us to train our young people to be knowledgeable consumers. Exten­ sive efforts must be made to incorporate Consumer Educa­ tion into each student's total school program so that he can function effectively as a consumer (23:2). Consumer Education is no newcomer on the scene. It was used a long time before it became a part of formal studies. Many developments in the United States' economy have combined to bring it to the fore. The sharp awareness of commodity prices has focused attention on the economic necessity of Consumer Education. The diverse claims of advertisers have caused consumers to examine products more closely. The upsurge in consumer education has also been caused, in part, by the failure of the to deliver the expected and promised abundance of goods and has instead delivered diffused prosperity (17:1). The promises of two chickens in every pot and two cars in every 18 garage did not come true for all Americans, but only for some. Consumers are involved 1n a society that has changed and is changing rapidly. Most have spent hours over the past years adjusting the hemlines in skirts to keep up with changes. Exuberantly adopted were the new fibers and fabrics which created wash and wear garments with a wrinkle free look all day. Utilized also have been the 'heat and serve,' and the 'freezer-to-oven' food which guaranteed to get homemakers in and out of the kitchen more quickly. Many of the basic areas of life have under­ gone a face lifting 1n recent years, and it is time Home Economics programs also changed by adopting a new plan to meet more fully the needs of the student, and to better prepare him to meet the life situations he will encounter after his first twelve years of education. The immediate concern with Consumer Education does not imply that other parts of Home Economics programs should be neglected, but only that this topic is a very important facet which should be expanded--and. expounded (19:43). Schools are becoming increasingly aware that they are being asked to help people become more responsible con­ sumers. In the late 30's and the early 40's, Consumer Education was an important part of the curriculum (19:41). Now, twenty years later, it is enjoying another heyday. This time around, however, the program needs to be 19

re-examined and improved to meet current needs. Consumer Education includes more than just buymanship. It needs to give skills which will help the student in all areas of family living. Skills are needed to help solve those problems common to many families: 1 .. How to make ends meet; 2. How to create a satisfying life with the available resources; 3. How and when to make decisions; 4. How to obtain recourse when necessary; 5. How to obtain reliable consumer information. Consumer Education is concerned with helping people at all economic levels to make decisions which will help them obtain maximum benefit from their resources. We must recognize we are working with a new consumer; one who is more affluent, though a vast majority are less affluent than others; one who is more sophisti­ cated; one who lives longer; one who is concerned with individuality and style, his own desires and his prior­ ities; one who has had much of his decision-making responsibilities taken over by a governmental agency; and one who is exposed daily to an abundance of clever advertising through the mass media enticing him with an infinite number of choices (19:43). A well known secondary school principal, Fred Wilhelms (32:6-9), commented: Consumer Education gets tremendous vitality and serves an essential function by moving right into real work-a­ day concerns of youth and adults. . . . The purpose of education in buymanship and money management is not (as so many seem to think) to teach young people to buy less, to snuff out their dearest desires, and to scrimp along in miserly fashion. Consumer Education makes no 20

sense--especially to vigorous adolescents, with their keen desires--unless it opens the road to getting more of what one thinks contributes to a good life . . . the real goal is to improve the quality of his wanting.

The cry for "relevancy" was the theme of dissenters

a decade past. Consumer Education should provide a practi- cal vehicle which students can use to explore their values, aspirations, and goals. By looking at their everyday prob- lerns, students should come to know themselves and become better able to guard against their own irrationalities.

Consumer Education should teach a student how to find and use reliable information and to develop a competency for solving problems which may be incurred in the marketplace.

Consumer Education should help a student to become aware of his rights and responsibilities as a consumer.

Because a student's personal interests are at stake, the process of education should take on meaning. Consumer

Education is intended to be much more than teaching one how to spend his money advantageously; it should be tied to developing a personal philosophy, finding satisfaction in daily living, and fulfilling a citizenship role in a free enterprise system (23:3).

As far back as 1943, Mendenhall believed Consumer

Education had the responsibility of presenting alterna­ tives to the constant effort to emulate the affluent portion of our society. Many people were spending their lives in a fruitless effort to try to attain a level of living which might not be possible for them. It was 21 essential that true values be discovered, and wise buying should enhance the consumer's ability to attain satisfac- tion at whatever level he finds himself (17:5).

One of the primary purposes of Consumer Education is to educate the consumer so that he can make choices instead of being told what he should do.

The common man has never had so many alternatives from which to choose. The welfare of the masses depends on how those choices are made. Consumer Education must attempt to equip people to function effectively in today's complex society, to help them use their resources wisely, and to understand the effect of their consumer decisions on the economy and the envi­ ronment. The time has come when we can no longer afford the luxury of ignorance in consumer affairs (13:30).

Educating its young is probably a society's second most fundamental task--second only to the problem of organ­ izing itself to carry out action as a society. Once organized, if a society is to maintain itself, the young must be so shaped as to fit into the roles on which society's survival depends (7:1).

Today's high school and college students are the homemakers and the parents of tomorrow. Upon them will rest the responsibility for developing families with wise habits of consumption and the ability and skill to make effective choices among many goods and services.

Irene Oppenheim stated in her book, The Family as

Consumers, "Education which helps adolescents learn to use resources to attain maximum satisfaction is no longer given in the home" (20:258). She advocated "that high school courses such as , economics~ home 22

economics, and social studies devote more time to Consumer Education'' (20:258). Oppenheim continued: The future of this nation may well depend on the values and standards developed by our young people than on any other single factor. It behooves us to give serious consideration to how we can help them develop a sense of responsibility for the ways in which they use their time and money (20:258). If this is true, and many factors indicate that it is, a concentrated effort to institute such a program into the public school curriculum should be launched. If it were possible to survey adult consumer knowledge at the present time, it would be increasingly clear that government and consumer groups cannot do such a massive educational job alone. Immediate help is needed from the public schools if we are to effectively analyze and publicize the information necessary for intelligent and responsible consumption and to change peoples' perceptions about our economy (32:57). Comment after comment can be gathered from educators who have recognized the need for such a program: In an increasingly technical world, the task of pro­ viding impartial guidance to consumers young and old has definitely become a public function to be provided through our system of public education (17:2). Since the organized public school system (elemen- tary, secondary, post-secondary, and ) is the primary agency which has almost universal contact with the public, it stands to reason that it should assume the major responsibility for Consumer Education. This type education should be a continuing process, from pre-school 23 through . Since it can be geared to the needs and maturity of the individual, it also can be made relevant to all age groups (34:8).

People separate from, but in tune with educators have similar thoughts on imparting consumer knowledge:

To develop within each individual the art of what Virginia Knauer calls 'intelligent consumption' a comprehensive system of Consumer Education must be organized within the public school system and must become an integral part of the curriculum at each grade level. The confusion which exists now concern­ ing the place of Consumer Education as well as its nature and composition must be· eradicated (13:25).

Past President Richard Nixon, in his February 24,

1971 Education Message to Congress, stated:

American education is in urgent need of reform. A vital part of this reform must be the inclusion of Consumer Education at every level of the educational process. Every effort should be made to help our young citizens become alert and responsible consumers (30:A-44).

Virginia Knauer, appointee of the President to watch over consumer interests stated:

Consumer Education is not merely a rhetorical exercise in buymanship. It is a continuing, lifetime learning experience. For that reason, we must realize its great potential as an integral segment of our total educa­ tional system supplemented by the informal influences of the home and community and supported by consumer organizations, government, and business (23:iii).

As America's marketplace becomes more technologi- cally sophisticated, consumer problems grow in number and in complexity. Con·sumer Education provides youth with a useful frame of reference, not only for the future, but also for the sometimes difficult and perplexing present. 24

Dr. Robert M. Worthington, Associate Commissioner of the Bureau of Adult, Vocational, and Technical Education, in the U.S. Office of Education, stated in his address delivered at the All-Eastern Consumer Education Conference at East Brunswick, New Jersey, on February 4, 1972, that . . . some resistance to Consumer Education in the public schools has in the past come ftom the local business community and from some teachers and other educators who would uphold traditional curricula, and who view Consumer Education as too materialistic. Consumer Education has also suffered from traditional chauvinistic attitudes toward women, in that it has usually been included in courses of Home Economics with all its domestic connotations (34:3). Dr. Worthington is undoubtedly right, but hopefully teachers, educators, businessmen, politicians, and others in managerial positions have been awakened to the great need for this branch of knowledge and that they are being made aware that the most expeditious way to disseminate the information is through the public school system. The curricula which follow give an idea of subject matter which could be included in a Consumer Education class which answers the cry for 'relevancy.' The first example from the Curriculum Design for Consumer Education: Through Grade Fourteen (6:ix) is a product of the Innovative Curricula in Consumer Education (INCINCE) project, which was developed and admin- istered by the staff of the Bureau of Homemaking Education, California State Department of Education, in cooperation with the Chancellor's Office, California Community Colleges. 25

The Consumer Consumer Life Styles Consumer Resources Consumer Decision Making The Consumer in the Marketplace Consumer Earning Consumer Spending Consumer Consumer Borrowing Consumer Buying The Consumer and the Community Consumer in the Economy Community Services Consumer Rights and Protection The Consumer and the Law Consumer and the Environment Consumer and the Media The second suggested curriculum guide was designed by educators in Orange County (4) and was published as a guide by the Orange County Department of Education.

You--As A Consumer Hustling A Job Managing Your Money Four Walls and A Roof Hamburgers, Cokes, and Other Foodstuffs High Cost of Wheels Fine ·Feathers and Body Wrappings Health Becomes You Insuring Your Risks Having Fun with and without Money Responsibility to the Community Because of differences in individual teachers (or teaching methods) and length of the. course, all Consumer Education classes cannot cover all of the subjects men- tioned. Students should benefit if even part of them are covered. Evidence of a need for additional consumer and homemaking programs is manifested in part by the government funds which have been made available for the expansion of 26

such programs to persons of all ages who desire and/or need

such training (1:25).

Much of the significance of the consumer-homemaking

curriculum development came about as a result of the passage

of the 1968 amendment to the Vocational Education Act of

1963. The amendment gave authorization to set forth a pro-

gram under which Federal funds paid to a state from its

allotment under subsection Part F will be expended solely

for educational programs which '~ill include Consumer Educa-

tion programs. 11 Part F authorized special funding for con-

sumer and homemaking education programs and mandated funding

of programs in economically depressed areas and those of

high unemployment (31:1064).

The most recent funding is Public Law 94-482, which

came into being October 12, 1976. Known to Consumer and

Homemaking educators as Subpart 5, part 'b' of Section 150 partially states:

Grants to states under this subpart may be used in accordance with five-year state plans and annual program plans approved pursuant to section 109, solely for (1) educational programs in consumer and homemaking education consisting of instructional programs, ser­ vices, and activities at all educational levels for the occupations of homemaking including but not limited to Consumer Education, food and nutrition, family living and parenthood education, child development and guid­ ance, housing and home management (including resource management), clothing and textiles which (A) encourage particlpation of both males and females to prepare for combining the roles of homemakers and earners; (B) encourage elimination of sex stereotyping in con­ sumer and homemaking education by promoting the develop­ ment of curriculum materials which deal (i) with 2!

increased numbers of women working outside the home, and increased numbers of men assuming homemaking responsibilities and the changing career patterns for men and women and ... (F) emphasize Consumer Education, management of resources, promotion of nutritional knowledge and food use, and parenthood education to meet the current societal needs . (29:90 Stat 2196; underlining supplied by this researcher) .

The President's Committee on Consumer Interests further stated that the purposes of Consumer Education include the following:

1. to help each student evolve his own value system; 2. to develop a decision-making procedure based on his own values; 3. to evaluate alternatives when purchasing goods or services; and 4. to understand his rights and responsibilities as a consumer in our society (23:2).

Pressure for including Consumer Education into the public school curriculum is mounting in many states. Some have taken action already and others are considering the action. Sections of the State of California have already passed legislation requiring mandatory courses in Consumer

Education, and other sections are still contemplating the decision. In 1967, the Illinois legislature became the first to make Consumer Education a-requirement for high school graduation. was next (23:5).

As early as 1943, an Illinois mandate stated:

Pupils in the public schools in grades 8 through 12 shall be taught and be required to study courses which include instruction in Consumer Education, including but not necessarily limited to installment purchasing, budgeting, and comparisons of prices (17:9~10). . 28

Precedents in the field of education have been set already by Illinois and Hawaii. This decade may well see other states following suit, with benefits to its students and ultimately to its consumers.

Fred Wilhelms summed it up nicely when he said,

... Consumer Education must be seen for what it can be: a tremendously versatile, multi-purpose vehicle of liberal education--one that uniquely combines the ability to dig into the earthiest problems with the power to shoot for the stars (32:13). CHAPTER III

METHODS OF INVESTIGATION

This project was a descriptive and comparative

study. Data were collected by means of a posttest which was developed by tha researcher and given to two groups of

students. The posttest was administered by certificated

teachers of Home Economics and of other disciplines at

Newbury Park High School. No special equipment or facil­

ities were deemed necessary.

Selection of the Sample

Two student samples were needed to complete the evaluation. One sample was comprised of students enrolled

in two Consumer Education courses in May, 1977. The other

sample was comprised of students enrolled in a Marriage and

Family course, and from students enrolled in a foods class entitled Meals for Moderns, also in May, 1977. The group of stud~nts who received instruction in Consumer Education has been designated as "Group A" in the study. The group who had never received instruction in Consumer Education has been designated "Group B." From these respondents,

87 usable posttests were secured.

29 30

Curriculum Outline for Consumer Education The Consumer Education course at Newbury Park High School is an elective, semester course. The curriculum outline for that class is as follows: Values and Goals Energy and Conservation Banking: Checking and Accounts Advertising Consumer Rights and Responsibilities Frauds, Swindles, and Consumer Law Small Claims Court The Budget Credit, Loans, and Lending Institutions Contracts Four Walls and A Roof/Rental Agreements Food/The Supermarket Shopping

The Posttest The posttest was a teacher-made test, and questions were representative of those which would appear on a final exar.lination for the Consumer Education course. The ques ·· tions were judged by the teacher to be among those which would assess attainment of concepts encountered in real life situations. The test content is reliable only to the extent that students who have taken the Consumer Education course at Newbury Park High School could reasonably be expected to be able to answer correctly. The same posttest was administered to both groups. Instructions for completing the posttest were both typed on the first sheet and read verbally to the class by the researcher. The researcher remained in the room while 31 the Consumer Education students completed the posttest. No talking was permitted among students. Instructors from the other two classes studied followed the same procedure. All posttests were administered on the same day to maintain as much consistency in circumstances as possible.

Anonymity was assured as there was no place on the posttest for respondents to sign their names.

All respondents were informed that the posttest was part of a college project being conducted by the researcher.

They were also informed that answers from the completed posttest might be used in curriculum development at Newbury

Park High School. Respondents were to indicate their responses to each question or statement by circling one of four possible choices.

Present~tion of Data

The collected data were tabulated in terms of per­ centage of correct responses to each question or statement. CHAPTER IV

ANALYSIS AND INTERPRETATION OF FINDINGS

The findings of this study were reported in per­ centages of correct responses and presented in tables. No other statistical tools were employed, A copy of the post­ test is included in the Appendix, p. 48.

Description of Respondents There were a total of 87 student respondents, with the sexes being represented almost equally. The student responses revealed that 86 percent, or 75 students, were between sixteen and eighteen years old, with the other 14 percent, or 12 students, in the age group thirteen to fifteen. The data additionally revealed that the 86 percen~ or 75 students, were in grades eleven and twelve,. and the 14 percent, the 12 students, were in grade ten.

Identification of Groups In the analysis of the findings, the student respondents who had never had a Consumer Education class were referred to as Group B. Respondents in Group B num­ bered 25. Student responde11ts who were currently enrolled in a Consumer Education class were referred to as Group A. Respondents in Group A numbered 62.

32 33

Automobile Insurance and Auto Purchase

Questions 1, 2, and 3 on the posttest dealt with

automobiles and automobile insurance (Table 1). In the

Newbury Park High School curriculum, information about

those topics is presented in a 10-day unit of the same name.

Results showed that Group A scored higher on all questions

than did Group B. Question 1 asked the respondents about

expenses of automobile ownership. Group A seemed to have

acquired through class instruction, some additional knowl- edge of ownership expenses. Questions 2 and 3 dealt with coverages under different sections of the auto insurance policy. Group A's scores appeared to reflect good reten- tion even though distinctions between the different sections of the automobile insurance policy appeared difficult for students to assimilate in class.

TABLE 1 AUTOMOBILES AND AUTOMOBILE INSURANCE

Group A Group B N=62 N=25 Question Percent Correct Percent Correct

1 60% 8% 2 78% 45% 3 75% 68% -···------·------34

Credit and Loans

Questions 4, 15, 22, 23, and 13 were all concerned with the various aspects of credit, and were presented in a 2-week unit of instruction (Table 2). Question 4 asked respondents the least expensive way to borrow money. Correct responses from Group A were noticeably higher than those from Group B in this area. Question 15 dealt with aspects of a person's credit rating. It must be noted that the percentage of correct responses from Group A was less than the percentage of correct responses from Group B. A review of question 15 revealed that it was written in the negative. Since information for answering question 15 had been presented in class, it might be assumed that the stu- dents did not read carefully enough to detect the negative format. Questions 22 and 23 respectively were concerned with the cost of credit on a fur~iture purchase, and the

TABLE 2 CREDIT, LOANS, AND LENDING INSTITUTIONS

Group A Group B N=62 N=25 Question Percent Correct Percent Correct

4 8 9% 64% 15 54% 68% 22 67% 36% 23 49% 32% 13 59% 52% 35

credit allowance a given family might reasonably permit themselves for a year. Procedures for figuring cost of credit and credit allowances had been presented in class. Correct responses from Group A were considerably higher on both questions. Question 13 sought student knowledge about the acceleration clause sometimes written into installment contracts. Correct responses from Group A were slightly higher than those from Group B.

Banking and Checking Accounts Questions 7 and 8 asked about banking and checking accounts. Answers to those questions were given in a 10-day unit of instruction (Table 3). Question 7 dealt with the available types of checking accounts. Group A scored lower than Group B, which would indicate a need for more class- room emphasis in that area.

TABLE 3 BANKING AND INSURANCE

Group A Group B N=62 N=25 Question Percent Correct Percent Correct

7 84% 88% 8 84% 56% 5 44% 8% 18 38% 44% 36

Question 5 concerned the economical purchase of life insurance. Though Group A scored higher than Group B, the percentage of correct responses was still low. This could be attributed to the fact that no unit was taught on life insurance per se. References to it would have been included in a discussion as a part of automobile insurance. Question 18 asked about responsibility in a horne accident case. Information on horne liability insurance was not covered at all in class, so ,all answers were from pri- vate knowledge.

Consumer Legislation, Frauds, and Protection Questions 6, 9, 10, 11, 12, and 20 dealt with frauds, consumer legislation, and . Those subjects were covered in a 2-week unit of instruction entitled "Frauds, Swindles, and Consumer Law" (Table 4). Both Group A and Group B showed about the same percentage of correct responses on question 6, which dealt with a responsibility of the Food and Drug Administration. These results might be attributed to the fact that activities of the Food and Drug Administration are often before the public eye, giving opportunities for learning to those who read the papers, listen to radio, or watch television. Question 9 asked students to identify the law which allows cancellation of a door-to-door contract for an 37'

amount over $50 within a 3-day time period. Group A showed a higher percentage of correct responses. Question 10 sought answers about a mechanic's billing responsibility when a car is left for repair.

Group A again had a higher percentage of correct responses. Question 11 asked students to identify consumer responsibility in the event unordered merchandise is

received in the mail. Group A maintained their higher percentage of correct responses.

A knowledge of consumer protection agencies was required to answer question 12, which related a problem about a dangerous toy. Group A had the higher percentage of correct responses.

Bait and switch was the scheme st~dents were asked to identify after question 20. Group A's correct responses on this question were again higher than those of Group B.

TABLE 4 FRAUDS, SWINDLES, AND CONSUMER LAW

Group A Group B N=62 N=25 Question Percent Correct Percent Correct

6 78% 80% 9 7 5% 12% 10 .S9% 68% 11 ,7 5% 40% 12 59% 16% 20. 92% 68% Foods and the Supermarket Question 19 quizzed the respondents on unit pricing, multiple unit pricing, national brands, and advertised specials. Group A seemed to have only slightly more famil­ iarity with the terms presented (Table 5) . Cost per serving was the answer sought in question 21. Skills for solving this problem were presented in a class unit of instruction. Group A respondents showed greater knowledge in this area .. Question 14 was a question about the government agency which regulates advertising. Though Group A showed fewer errors than did Group B in this area, the margin of difference was smaller. One might assume there is more familiarity with supermarket nomenclature than with nomen- clature in other areas of consumerism. Who ultimately bears the cost of advertising was the question asked in situation 17. Group A displayed

TABLE 5 FOODS AND THE SUPERMARKET

Group A Group B N=62 N=25 Question Percent Correct Percent Correct

14 41% 32% 19 65% 60% 21 68% 56% 17 80% 56% 39 their knowledge of this subject in an impressive margin over Group B. CHAPTER V

SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

Summary A study was conducted at Newbury Park High School in the Conejo Valley Unified School District to assess the consumer knowledge in two groups of high school students, one group who had never had a class in Consumer Education, Group B, and the other group who were currently enrolled 1n a Consumer Education class, Group A. Information was gathered by the use of a posttest administered by four certificated instructors among four high school classes. Eighty-six percent of the students tested were in grades eleven and twelve, and the remaining 14 percent were in grade ten. For purposes of analysis, the 23 questions on the posttest we:ce grouped into five groups: Automobiles and Automobile Insurance; Credit, Loans, and Lending Institu­ tions; Banking and Insurance; Frauds, Swindles, and Consumer Law; and Foods and the Supermarket. Overall, Group A, who had been enrolled in a Consumer Education 'class, had a higher percentage of correct responses in the five areas, than the Group B respondents who had never been in such a class.

40 ., 4 j_

Conclusions Several conclusions were made based on the posttest analysis. The group of students who had instruction in the Consumer Education classes displayed greater consumer knowl- edge than the group who had never had the class. It was concluded that Group A's consumer skills were more developed because of their attainment of knowledge from the Consumer Education class than consumer skills among students in Group B, who had not had the class. Another conclusion which might be formulated was that when student responses from the group who had received instruction displayed a very high percentage of correct . answers, the instructor probably emphasized that material in class. When the percentage of correct responses from the same group was low in certain areas, the instructor probably did not emphasize that information as forcefully during classroom instruction. In some areas, Group B, who had no instruction in Consumer Education scored a high number of correct responses. It was concluded in those instances that outside factors such as the mass media, job experiences, reading, and parental guidance may have served to give the required input. Conversely, when Group B scored a high percentage of incorrect responses, outside information in those par- ticular areas was probably not easily available to them. 42

Thus, having received no instruction, their scores were low. This would reveal a need for instruction. The same principle applied to Group A. When responses were exceedingly high in certain areas it was concluded that, in addition to classroom instruction, out­ side sources influenced their consumer knowledge in a positive way. It was concluded, therefore, that the objective of this study was reached. The objective was to determine whether students who had studied Consumer Education were equipped better to meet the challenges of the marketplace, were able to make better cogent decisions about financial expenditures, and were able to apply practically their acquired knowledge to everyday situations, than students who had no instruction in Consumer Education. To be a part of the lifestyle of the 1970's demands that one be a rational and an . Wise buy­ manship in this decade requires a consumer to have knowledge in the areas of chemistry, dietetics, real estate, and economics, to name only a few. During the course of this study, it became increas­ ingly apparent that consumer knowledge was enhanced and developed in a high school Consumer Education class. As a result of those findings, it was recommended that: 43

1. A Consumer Education class be mandatory for graduation from Newbury Park High School and from other high schools in the Conejo Valley Unified School District. 2. A program of advertising for and about the Consumer Education class be conducted to help students under­ stand what Consumer Education is and what it includes. 3. Students and parents should be made aware that the district requirements currently being formulated for graduating high school seniors include many profi­ ciencies in the areas which Consumer Education covers.

Recommendations Recommendations for future studies include: 1. A similar study, conducted on a larger scale to further test the findings of this study. 2. A study to determine specific needs and interests of students in the area of Consumer Education. BIBLIOGRAPHY

44 BIBLIOGRAPHY

1. Alexander, Margaret, and Hart, Mary Lee. "New Chal­ lenges for Home Economics Educators." Journal of Home Economics, 61 (December, 1969): 20-25. 2. American Home Economics Association. Consumer and Homemaking Education. Washington, D.C. : American Econom1cs Assoc1at1on, 1971. · 3. Armstrong, Jan, and Uhl, Joseph N. "Survey of Consumer Education Programs in the U.S." The Journal of Home Economics, 63 (October, 1971): 524-530.

4. Bielefeld, Carole, ed. A Guide fo~ Teaching Consumer Education. Santa Ana, California: Orange County Department of Education, 1974. 5. "Big Shifts in How Americans Spend." U.S. News and World Repbrt, 83, No. 18 (October 31, 1977): 76-77. 6. California State Department of Education. Curriculum Design for Consumer Education: Kindergarten tnrougn Grade Fourteen. Sacramento: Office- of State Print1ng, 1974. 7. Coleman, James S. The Adolescent Society. New York: The Free Press, 1961. 8. Engel, James F.; Dollat, D. T.; and Blackwell, R. D. Consumer Behavior. New York: Holt, Rinehart and Winston, 1968. 9. Frank, Lawrence. "Training in· Homemaking Contributes to Higher Standards of Living." School Life, 16 (November, 1930): 41-42. 10. Federal Board for Vocational Education. Administra­ tion of Vocational Education. Bulletin No. 1. Was]iln-gton, D. C: Government Printing Office, 1958.

11. Federal Board for Vocational Education. Homa Economics Education and Organization. BulletinNo. 28. wa'Slu:ng-ton-;~.: Government Printing Office, 1922.

45 46

12. Guralnik, David B., Editor in Chief. Webster's New World Dictionary, Second College Edition. New York: World Publlshing, 1972.

13. Hamilton, David. The Consumer in the Economy. Boston: Houghton Mifflin, 1967.

14. Hansen, Flemming. Behavior. New York: The Free Press,- 1972.

15. Houthakker, H. S., and Taylor, Lester D. Consumer Demand in the U.S.: Analyses and Projections. Cambrldge, Massachusetts: Harvard University Press, 1970.

16. Katona, George. Psychological Analysis of Economic Behavior. New York: McGraw-Hill, 1951.

17. Mendenhall, James, and Harap, Henry, eds. Consumer Education. New York: D. Appleton-Century, 194-3.

18. Miller, Roger Leroy. Economic Issues for Consumers. New York: West Publishing, 1975.

19. Newkirk, Gwendolyn. "Consumer Emphasis in Homemaking Programs." Consumer and Homemaking Education. Washington, D.C.: American Home Economics Asso­ ciation, 1971.

20. Oppenheim, Irene. The Family as Consumers. New York: Macmillan, 1965.

21. Peterson, Mary Bennett. The Regulated Consumer. Los Angeles: Nash Publishing, 1971.

22. Phillips, E. Bryant. Consumer Economic Problems. New York: Henry Holt, 1957.

23. The President's Commission on Consumer Interests. Suggested Guidelines for Consumer Education, by Vlrglnia Knauer. Washington, D.C.: Government Printing Office, November 1970.

24. Ramparts Magazine Editors and Frank Browning, eds. In the Marketplace: Consumerism in America. San Francisco: Canfield Press, 1972.

25. Spitze, Hazel T. "Consumer Education in the Secondary Curriculum." Illinois Teacher; 13 (November­ December, 1969): 3-27. 4'7

26. Spitze, Hazel Taylor. "Reading Materials for Func­ tionally Illiterate Consumers." Consumer and Home­ making Education. Washington, D.C.: American Home Econom1cs Association, 1971.

27. Thomas, Walter L. "Values and American Youth." Consumer and Homemaking Education. Washington, D.C.: American Home Econom1cs Association, 1971.

28. U.S. Bureau of Education. Education for the Home, Part II, by Benjamin R. Andrews. Bulletin No. 37. Washington, D.C.: Government Printing Office, 1915.

29. U.S. Code Congressional and Administrative News, 2. "Educat1onal Amendments of 1976 .'' T1tle II of Public Law 94-482, 94th Congress, 2nd .Session, 1968. St. Paul, Minnesota: West Publishing, 1977.

30. U.S. Congress. The 27th Annual C.Q. Almanac. David Fouquet, Arlene Alligood, Carry Polsky, Elder Witt, eds. Washington, D.C.: Congressional Quarterly, 1972.

31. U.S. Congress. An Act to Amend the Vocational Educa­ tion Act of 1963. Public Law 90-576, 90th Con­ gress, 2nd Session, 1968.

32. Wilhelms, Fred. "Consumer Education: Its New Look." National Association of Secondary School Princi­ ~Is, 5 (October, 1967): 3-58.

33. Wilhelms, Fred; Heimerl, Ramon P.; and Jelley, Herbert M. Consumer Economics. 3rd ed. New York: McGraw-Hill, 1966.

34. Worthington, Robert M. "The Need for a Nationwide Program of Consumer Education Coordinated through the Public School System.". Report to the All­ Eastern Consumer Education Conference, East Bruns­ wick, February 4, 1972. APPENDIX

STUDENT POSTTEST

48 49 ' '

CONEJO VALLEY UNIFIED SCHOOL DISTRICT NEWBURY PARK HIGH SCHOOL CONSUMER EDUCATION

STUDENT POSTTEST

Instructions: Please check the following personal informa­ tion about yourself.

Age: 13-15 ---- 16-18---- 19-20 ---- Have you completed a course in Consumer Education? Yes No

DIRECTIONS: Put the letter of the one best answer on the line.

1. Harry Creighton has a new Ford hardtop. What will be his largest car expense this year? a. depreciation b. insurance c. gas and oil d. maintenance

2. Alex's car was stolen. The insurance company paid for the car because Alex has a. liability insurance b. collision insurance c. comprehensive insurance d. property damage insurance

3. Sara was in an accident. It was her fault, and she couldn't collect from the other driver. But her own insurance company paid for most of the repairs to Sara's car because she had a. liability insurance b. collision insurance c. comprehensive insurance d. property damage insurance

4. The least expensive way to borrow money is from a. a bank b. a Savings and Loan c. a Pawnshop d. a Credit Union

5, The most economical insurance to purchase is a. straight life b. whole life c. term d. annuities 50

6. The Federal Agency responsible for the ingredients used in cosmetics is a. the Food and Drug Administration b. the Federal Trade Commission c. the Interstate Commerce Commission d. the Federal Communications Commission

7. Toni and Joe were just married, and they want to open a checking account which both of them can draw from. The best one would be a. an individual account b. a mutual account c. a joint account d. a ten plan

8. Kim wants to send a check through the m~il which can only be deposited to her account. The type endorsement she will use on that check is a. a blank endorsement b. a special endorsement c, a restrictive endorsement d. a transferal

9. Cathy bought a set of story books costing $86.50 from a door-to-door salesman, and her husband decided later that they could not afford the books at this time. Cathy can cancel the contract she signed within three days because of a consumer protection law which makes mandatory a. truth-in-lending b. warranty guarantee c. cooling-off-period d. customer satisfaction

10. Terry took her car into a station near where she worked because it had a problem with overheating. The mechanic diagnosed the problem as a faulty ther­ mostat and gave her a written estimate for its repair, and she went to work. As he was fixing the thermostat, the mechanic ran into some problems, and the work took two hours longer than he had anticipated. He a. can change the written estimate to include two hours more labor b. should have called and verified it with Terry before he did the extra work c. has every right to charge Terry for the extra two hours d. can say he found additional problems, and show her some parts he had to replace 51

11. Tracy received a package he had not ordered in the mail. He can a. return it unopened, marking it "refused" b. keep it and do nothing c. inform the post office d. a, b, and c 12. Mrs. Thomas' daughter was given a "pea shooter" for a toy. When the little girl breathed in to shoot the peas, she swallowed four of them and almost choked. Mrs. Thomas should complain to a. FDA b. FTC c. BBB d. ERA 13. If Mike and Sandra Tucker miss a payment on their new couch, what might the finance company do if their contract contains an acceleration clause? a. demand they pay the entire balance NOW b. repossess the furniture c. garnish Mike's d. a and b 14. The government agency which regulates advertising is a. the FCC b. the FTC c. the FDA d. the ICC 15. Jeff and Marcy would like to buy a car, but they will have to borrow money to do it. They think they have a good credit rating, but they are not sure. Their credit rating is NOT a. based largely on their pastrecord of-meeting payments b. carefully investigated by a credit grantor c. based solely on the size of their income d. an important part of th.eir personal reputation 16. Bob and Judy are overwhelmed by the amount of advertising as they shop for a new CB radio. They need to realize that the main purpose of advertising is a. to inform buyers of new products b. to give product information c. to sell products d. to lower the of goods and services 52

17. Bob and Judy would like to know if the cost of advertising is ultimately paid for by a. the consumer b. the middleman c. the producer d. the retailer 18. Harry and Sherry are renting an apartment while Harry finishes his Master's Degree at Old State. A couple of their friends carne over to visit one night, and while trying to get a drawer in the kitchen open, Sam severely cut his hand. Harry had .notified the apartment manager two weeks earlier that the drawer needed to be repaired. Who is responsible for the doctor bills incurred when Sam had his hand stitched? a. Harry and Sherry b. the apartment manager c. the apartment owner d. Sam 19. Sharon, a young housewife is confused trying to figure out the most economical brands to buy in the supermarket. She should a. rely on multiple unit pricing b. shop only the advertised specials at every store c. shop where unit pricing is av~ilable d. buy only recognized national brands 20. A sewing machine was advertised for $79.98 by Sew-Mor Inc. Diane took the ad and went to the store. A salesman informed her that the last machine for that price had just been sold, but he had another model which sells for $98.99. Diane is a victim of a. the pigeon drop scheme b. bait and switch c. a loss leader d. lo-balling 21. Shirley and John are having a dinner party, but they do not have a lot to spend. They will need three pounds of steak for the five people she wants to serve, and the steak costs $1.49 a pound. Cost per person will be about a. $1.35 b. $ .89 c. $2. 0 0 53

22. Jan is planning to buy a table with a list price of $300. When shopping for credit, she found that at Modern Furniture she could get the table for $25.00 down and $13.10 a month for 26 months. The cost of credit was a. $67.20 b. $37.20 c. $65.60

23. The Green's take home $100 a week. They would like to buy some new furniture, but they do not want to overextend themselves. Their yearly credit allow­ ance should be a. $1040.00 b. $2000.00 c. $ 500.00 C: .·> .1 ~t

CORRECT RESPONSES TO POSTTEST QUESTIONS

1. a

2. c

3. b

4. a or d is acceptable

5. c

6. a

7. c 8. c

9. c

10. b

11. d

12. b

13. d

14. b

15. c

16. c 17. a

18. a, because they carry a Homeowner's Policy or c if they file suit against him

19. c

20. b

21. b

22. c

23. a