ECONOMICS CHAPTER 5 NOTES

Q1. Who is a consumer? Ans. Consumer is anyone who purchases goods or services for a price and makes use of such goods and services. Q2. What are the various forms of consumer exploitation? Or What are the various ways in which consumers are exploited? Ans. The various forms of exploitation of consumer are:1) Adulteration: It means mixing undesirable and inferior materials in food items. It affects the health of consumers. It also leads to monetary loss as consumers have to pay for lesser quality. 2) False or incomplete information: Sellers may mislead the consumers by giving false information about a product like its quality, durability, expiry date, safety, etc. , through advertisements e.g. Cosmetics , electronic goods,etc. 3) Under-measurement: The goods being sold in the market are not measured and weighed properly. Thus, consumers are exploited. 4) Hoarding and Black marketing: Traders generally hold stock of essential commodities to create artificial scarcity in the market so that they sell them at higher price.

5) Substandard goods: Sellers usually sell inferior goods to make more profits. Thus, exploits the consumer. 6) High prices: Very often traders change the price higher than the prescribed retail price. 7) Unpleasant behaviour and undue conditions: In matters like LPG connections or fixing of new telephone lines, consumers are often harassed and undue conditions are put before them. 8) Duplicate articles: In the name of original articles, duplicate articles are sold to the consumers. 9) Lack of safety device: Electronic goods require safety devices like built- in stabilizers,etc. but in many cases, it lacks safety devices in the product. Thus, it causes harm to the product. 10) Unsatisfied after sell services: Many high priced durable items such as home appliances, cars, etc. need after sell services. The producers may not provide these services inspite of necessary payments. Q3. What are the factors which lead to exploitation of consumer? Ans. 1) Limited information: For a correct decision and choice about a product a consumer needs to have information about the rice, quality, durability, etc. of a product. Due to lack of information, the consumer generally gets exploited. 2) Limited supplies: When the supply of goods is less than demand, it encourages the exploitation of consumers due to hoarding. This even results in inflation.

3) Limited competition: When one producer or a group of producers control the production and supply of a product, there is a possibility of manipulation of prices and availability. 4) Low literacy: Illiteracy causes ignorance which leads to exploitation of consumers. Also,the level of consumer awareness in India is low. Q4. Define Consumer awareness (consciousness). Ans. Consumer awareness means educating the consumers about their rights and duties so that the consumers know the laws that protect their interest and restricts traders exploitation. Q5. Why is there a need for consumer awareness? Ans. When government withdraws itself from production activities and allows the private sector to take over, there is a need to enforce discipline and regulation in the market. The consumer has to be aware of not only the commercial aspects of sate and purchase of goods but also about the health and security aspects. Adulterated and contaminated food is a major cause of illness. Therefore, ensuring the safety of food items is very important for creating awareness among consumers for their welfare. Q6. Explain the Rights of consumers under the consumer protection Act of 1986. Ans. 1) Right to safety: The consumers have the right to be protected against marketing of goods which are hazardous to life and property. 2) Right to be informed: Consumers have the right to be informed about the quality, quantity, purity, standard and price of goods.

3) Right to be heard: The consumers can raise their voice against exploitation at appropriate forums related to consumer welfare. 4) Right to choose: Consumers have a right to access various goods and services at competitive prices. In case of single supplier, consumers have the right to be assured of satisfactory quality and fair price.

5) Right to seek Redressal: Consumers can seek redressal against unfair trade practices or exploitation. Consumers have the right of fair settlement of genuine grievances.

6) Right to consumer education: Consumers have the right to have knowledge about goods and issues related to consumer welfare 7) Right to represent: The Consumer Protection Act gives consumers the right to represent in consumer courts for our grievances.