Consumer Economics: Money, Ads, Banking and Contracts (CASAS Competency 2)
The Consumer Economics area tests the money decisions adults make in the marketplace: reading ads and price tags, comparing value, using coupons, checking receipts and sales tax, returning merchandise, managing a bank account, budgeting, and understanding the terms of a contract or loan before signing.
Core rules and concepts
- Unit price = price divided by quantity. Compare only when units match (per ounce with per ounce, not per ounce with per pound).
- Discounts come off the price; sales tax is added to the discounted price.
- Return policies turn on receipt, time window, packaging, and exclusions such as final sale, no returns on opened software, or a restocking fee.
- Bank records: balance versus available balance, pending transactions, service charges, overdraft fees, minimum balance rules.
- Contracts state the monthly payment, the term, the interest rate (APR), and the early-termination or late fee. The monthly payment alone is not the cost.
- Online safety: a secure checkout uses https, and no legitimate seller asks for a Social Security number, PIN, or payment by gift card over text or email.
Worked example
Two boxes of cereal: 12 ounces for $2.88, or 20 ounces for $4.40. Which is the better value? Reasoning: 2.88 divided by 12 is $0.24 per ounce, and 4.40 divided by 20 is $0.22 per ounce. The 20-ounce box costs more at the register but two cents less per ounce, so it is the better value. Note that 'which costs less?' and 'which is the better buy?' have different answers, so read the stem.
Traps that cost marks
- Adding two discounts: 20% off then 10% off is not 30% off, because the second applies to the reduced price.
- Computing tax on the original price rather than the sale price.
- Reading 'buy one, get one 50% off' as half price for the whole purchase.
- Confusing the monthly payment with the total cost of a loan or lease.
- Trusting a receipt total without checking the line items and whether the coupon was applied.