Consumer Studies Survival Kit

CAPE WINELANDS EDUCATION DISTRICT CONSUMER STUDIES REVISION PACK

SPECIFICATION HOW TO IDENTIFY OF PRODUCT “ 4 AN IDEA + detailed description + Identify need * ensure standard is ENTREPRENEURSHIP + Do research retained «produ stays the IDEA TO PRODUCT \ same / SEE FORMULATING AN IDEA . + Start with good idea Requirements SEE Components + Idea must suit your skill of profitable of business plan * Compile business plan business Profit threshold (break even point) START-U P is when minimum sales covers total cost PASS | fe) N (income = production cost with no profit) CAPITAL TARGET REQUIREMENTS MARKET TESTING OF PROFITABLE THE IDEA 7X PRODUCT/ SERVICE COMPETITIVE LOCATION i ADVANTAGE SWOT INFORMATION ai —— ON BUSINESS ; teen COMPONENTS PRODUCTION - pleace OF A BUSINESS PLAN * Price PLAN - MARKETING a / PLAN (5P's) MANAGEMENT ane FINANCIAL * Promotion PLAN PLAN | place. + price

CONSUMER ATTRACTION Visual Smell + Feeling Taste FACTORS TO CONSIDER CHOOSING A PRODUCT AVAILABLE RAW MATERIALS FINANCIAL RESOURCE aS Start-up cost WORK SPACE Options where money could be obtained: Own savings/Bank loan Partner/Investor Operating cost AVAILABILITY OF HUMAN RESOURCES knowledge, experience creativity, skills, motivation Cost of employment Type of workers UIF= Unemployment insurance fund PAYE= Pay as you earn Partner=active member working in business Investor = only give money REQUIREMENTS OF EFFICIENT PRODUCTION + effective use of time + correct methods of storing + good customer relations maintenace of equipment + training of staff EFFICIENT PRODUCTION means that ingredients and human resources are used in such a way to: 7. Increase production 2. Reduce waste STOCK CONTROL Ensure correct quality & amount Reduce wastage Reduce theft Production not interupted Limited money invested in stock FACTORS INFLUENCING EFFICIENT PRODUCTION PLANNING + Production goal - how many to produce + Production plan - workschedule of weorkers and sequence of products + Production cost- determine selling price ‘KEEP TO SPECIFICATIONS Ensure the same quality and quantity CONTROL OF FINANCES A BUDGET - Plan income & expenditure and H YG I E N E fe} F compare to actual figures B VOORRAADAANKOPE - highest expense WORKERS TOO LITTLE TOO MUCH 1. Reduce illness of workers + production stop + less proofit + Dissatisfied clients C COSTING - all costs (fixed, variable, mark-up) * cash flow problems * products can spoil & waste * shortage of storing space 2. Prevent contamination (cross contamination) 3. Satisfied clients QUALITY CONTROL + Regular inspections in all processes (buying, producing, final product, packaging) + Ensure quality products + Reduces wastage + Saves money TIDY WORKPLACE + Production faster - not seeking for anything + Prevent injuries + Prevent contamination (cross contamination) MEASURES FOR DELIVERIES Cover food to protect against contamination _ SUSTAINABLE PRODUCTION + If perishable transport \ 7 refrigerated + Deliver warm foods STORAGE - immediately + Critical as it could affect quality + Keep to delivery dates + Product lost = money lost and times + Pack carefully to avoid STORAGE STATEGIES - damage + Store most used items near door of storeroom + Place items in shelves/containers for easy identification Computerprogrammes good for stock control Store toxic/hazardous material seperate + Store items according to instructions - DEFINITION Using goods/services to improve quality of product and environmentt by redusing the use of natural resources toxic chemicals + waste and pollution _ RESPONSIBILITY OF CONSUMERS + Reduce - fix, less packaging + Reuse - change in new item + Recycle make compost WASTE Anything that is thrown away If waste is not bio-degradable it will fill rubbish dumps (plastic, tin)

PERSONS - + TARGET MARKET - people that will pay for product + people doing the marketing PLACE + Where produced + Where sold - PRODUCT + NAME/BRAND -identify product and MARKETINGPLAN (5P's) linked to quality + IMAGE - created by advertising + LABELS- contain information on production, ingredients and date stamps + PACKAGING- must draw the attention of PRICE must ensure survival + must ensure profit + must increase market share + must increase sales Price strategies + Cost based + Demand based + Competitive FINANCIAL FEASIBILITY ’ PURPOSE + Discover strengths and weaknesses of business + determine if business will be profitable and if it will succeed ’ BEST/WORST CASE SCENARIO BEST - al! products is sold WORST - not enough products sold to cover montly costs/expenses consumer, must fit the product, must be strong and protect item, must be airtight to keep out moisture PROMOTION/ADVERTISING + ASA(Advertising SA) controls advertising standards + Requirements for advertising - AIDA (Attention must be drawn, Interest must be created, Desire must be created, Action to buy must be inisiated + Type media - printers, bill boards, social media, (email/sms/Facebook/internet) TERMINOLOGY + START-UP COST - cost to start business PRODUCTION COST - expenses to produce goods/services FIXED COST - cost remaining the same (rent) * OVERHEADS - additional cost to operate business (water, electricity, fuel, stationary, telephone,etc.) + VARIABLE COST - cost changing every month, increased prodution = more resources needed + TOTAL COST = fixed cost + variable cost + SELLING PRICE = Total cost + mark-up {mark-up= the %added to total cost price, includes overheads and profit) PROFIT - is the reward business owner receives (calculated by subtracting expenses) CASH FLOW PROJECTION | WHY IMPORTANT + Budgeting will help prevent business failing + Not cast in stone or accurate as there may be unforseen expenses + Identify problems early for corrective steps can be taken + Ensure business stay profitable STEPS TO SET UP . Identify sales targets . List expenses . Calculate total expenses . Subtract total expenses from targeted income (asin nr. 1) 5. Determine bank balance at end of month BRWDN

_ Salt nm ~ Lu DANGERIOUS ! no = __—— INTAKE MUST BE VERY SMALL uw = 5 -— J Fat Q wi ~ = Q _-— Sugar —| — w i | <a NOT GOOD BE VERY CAUTIOUS J rE INTAKE NEED TO BE CONTROLLED ao o Alcohol a> — o —~ Be active = k c Eat Variety of foods oO Lu —_ Starchy foods the basis GOOD FOR BODY oO oO of most meals REGULAR/ py chicken, fish, meat, milk/eggs DAILY <— ~~... Fruit & vegetables IN TAKE NEEDED n "~~~ Dry beans, peas, lentils, soya \, Lots of water HEARTDISEASE DESCRIBE CHOLESTROL caused by cholestrol build-up White waxy eee. blocking arteries substance in 7" CAUSES blood that is CORONARY HEART produced in ISEASE, HI 0 the liver NOT CONTROLABLE CONTROLABLE ® See teen op i + Genetic * overweight and no excersice ARTHERIOSCLEROSIS + Age + Smoking Q coum, + Men - higher risk + Stress + Too much alcohol TIPES CHOLESTROL “™ LDL 7 LOW DENISTY LIPOPROTEIEN Bad it causes plaque build up Blocks arteries causes artheriosclerosis \ DANGERS OF CHOLESTROL Narrow/block chotesterot arteries and prevent blood flow HDL HIGH DENISTY LIPOPROTEIEN Good removes plaque build up Heart - heart attack causes of — BLOCKED 9 => Brain- stroke Remove excessive cholestrol and transports BLOODFLOW . a we ‘Limbs- Gangareen it to liver where it is broken down

©. O8 my i Excersise regulary cholestrol aturated fats EA: : Meanie ~ fibre Coronary heart disease, High blood —,.- Ateriosclerosis LIFE STYLE GUIDELINES ¥) Saturated TS @ marie fats | Water soluable fats FFG) -ezunes fibre PREVENTION DEFINITION \ 3 HIGH BLOOD PRESSURE/ HIPERTENSIE LIFESTYLE dL DANGERS CHANGES PREVENTION DEFINITION \ ZA ANEMIA / \ DANGERS CAUSES LIFESTYLE CHANGES

FEARS ~ As DONE GMO/ GENETICALLY CROPS DISADVANTAGES | wT pul ATED MANIPULATED ADVANTAGES SL ADVANTAGES CONSUMERS ADVANTAGES FARMERS/ DISTRIBUTORS PRODUCERS DISADVANTAGES Fal DESCRIPTION A ORGANIC FOOD | ™ ADVANTAGES LABOUR INTENSIVE METHODS DISADVANTAGES DESCRIPTION IRRADIATED FOOD ADVANTAGES TYPE OF FOODS IRRADIATED

FOOD ADDITIVES |_ > DESCRIPTION > —s==p.- REASONS FOR FLAVOURANTS ANTI- OXIDANTS a CHEMICALS TYPES ADDING NUTRIENTS STABILISERS // BLEACHES/ EMULSIFIERS PROBLEMS ASSOCIATED WITH LOCAL ~\ COLOURANTS DESCRIPTION ~~ AVAILABILITY FOOD SECURITY Le REASONS WHY SOME HOUSEHOLDS DO NOT HAVE FOOD SECURITY / \ DEPENDING FACTORS TREATMENT \ DESCRIPTION \ HEPATITUS / INCUBATION TIME / METHOD TRANSFERRED

TREATMENT 7 DESCRIPTION » E COLT INCUBATION METHOD TIME TRANSFERRED TREATMENT \ 7 DESCRIPTION GASTRO- ENTERITIS INCUBATION METHOD TIME TRANSFERRED

GRADE 12 CONSUMER STUDIES TERMINOLOGY ENTREPRENEURSHIP 1. Entrepreneur: • A person who sells or produces products in order to make profit • A person who starts and manages his/her own business • A person who notices a gap/ recognises business opportunities within the market and transforms it into a successful and profitable business venture 2. Business plan: • A formal statement of what a business wants to accomplish and how it intends to accomplish it 3. Target market: • Is a specific group of people who would be interested on your products/services and purchase them • People who share the same characteristics e.g. gender, age, occupation, buying habits, income group and culture 4. Market research: • Is a planned and organised effort to get new knowledge/facts that will help the entrepreneur to make informed decisions about his/her product and marketing thereof • Is conducted to find out about the potential market and to identify what the market needs and wants are 5. Start –up capital: • Are costs/money needed to set up/start a business and to run it until it reaches the profit threshold 6. Start-up resources: • Material and human resources needed to start up a business 7. Profit threshold: (break-even point) • The point where total costs (expenses) and total sales (revenue) are equal. There is no net profit or loss • When the income equals the expenditure and the business shows no profit or loss • Is the minimum number of sales necessary to cover all expenses 8. Operating costs: • are costs paid out to run the business and to produce the product • costs of all extra expenditure to run the business 9. Product specification: • Are the standards that must be maintained in making a product • Detailed statement describing the product • Ensures that consumers will always get a good quality product regarding appearance, texture, taste, size 10. Quality control: • Is the process of inspecting products to ensure that the required standards are met • Is the procedure for making sure that the quality of a product is maintained through inspection to meet the required standards 11. Sustainable production: • Using goods and services to improve the quality of life and meet basic needs of consumers without harming the environment 12. Profitable business: • A business that fulfils an unmet need in the market place and generates profit 13. Trade mark/name:

• A specific identification that makes it easy to recognise and distinguish competitor’s products 14. Stock control: • Is the process of ensuring that the business does not run out of raw material • Is the process of ensuring that production will not be interrupted as a result of a shortage of raw material 15. Production costs: • Are the expenses that a business must pay in order to supply goods and services to its customers • Costs involved in the manufacturing and packaging of the product 16. Fixed costs: • Are the costs that remain the same regardless of how many products are made 17. Variable costs: • Are costs that are likely to change 18. Overheads: • These are the additional costs that must be paid in order for the business to operate 19. Efficient production: • Utilising material and human resources so that productivity is increased with little wastage 20. Selling price: • Production costs plus the profit 21. Mark up: • Is the percentage or amount that is added to the cost price to cover all the overheads expenses and still leave money over for a profit 22. Profit: • Is the reward the business owner receives for investing money in the business 23. Cash flow projection (forecast): • Is a document that shows the movement of money over a future/forecast period 24. Financial feasibility study: • A study of whether a business will be a success after taking into consideration its total costs and probable revenues 25. Sustainable profitability: • A business that is in production for a long period of time, covers all expenses and shows a profit 26. SWOT analysis: • A way to identify and analyse a company’s goals by assessing its strength, weakness, opportunities and threats 27. Gross salary: • Income/salary before deductions are made 28. Net salary: • Income/salary after deductions are made 29. Competitive edge: • A business that offers a better product than the local businesses 30. Work plan/implementation plan: • Is a document that states what tasks are to be done to achieve your goals, with reference to available time and human resources 31. Marketing mix: • Variables of product, place, people, promotion and price are five elements of marketing mix strategy that determines the success of the product in the market place 32. Marketing strategy: • A process that can allow an organisation to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage

GRADE 12 CONSUMER STUDIES TERMINOLOGY CLOTHING 1. Fashion: • Is a style of clothing that a specific group of people accept and wear at a given time and place 2. Style/Fashion style: • Is the specific characteristic that make one product or item different from another product of the same type • Differences or additions whereby similar products are distinguished from one another 3. Silhouette: • This is the outline of your body or a garment, which you can see from a distance, even before you notice the detail of the style 4. Classic styles: • Are styles that are continually accepted because they are timeless and tasteful 5. Fads: • Is a fashion with very short lifecycle • Is any style that catches on among a large group of people, it comes and goes very quickly • Items that suddenly become popular but disappear again just as quickly 6. Fashion/standard trends: • the directions in which the fashion moves • trends start, grow, evolve and decline gradually 7. Retrospective fashion: • Refers to clothes that imitate the style of the previous era • Fashion often looks to the past for inspiration 8. Contemporary fashion: • Is the style that many people accept and wear, manufactured in larger quantity and sold at low price 9. Haute couture/high fashion: • These are new, unique and exclusive styles that are created by fashion designer and expensive FASHION CYCLE 10. Introduction/launch/beginning stage 1: • Fashion is introduced • At this stage the fashion leaders accept or reject the style 11. Rise stage 2: • The fashion gains popularity as more people accept it 12. Peak stage 3: • The fashion reaches the height of its popularity and widely accepted by many people, many people wear it 13. Decline stage 4: • Boredom sets in and fashion declines as fewer and fewer people wear it, until no one wears it and it is marked down by shops 14. Obsolete/obsolescence stage 5: • Garments go out of fashion. At this stage a new fashion trend has been established • The fashion cycle is completed 15. Brand piracy: • When the product is given a name that is similar to that of a well-known brand deliberately so that consumers may mistake it for the actual brand name

• Unauthorised use of protected trademarks, brand names or logo and the imitation of labels, packaging of products 16. Counterfeit: • Are replicas of the original product • An illegal copy of a product 17. Eco-fashion: • Clothing produced by methods that are not harmful to the environment • using organic raw material or recycled material • using material that has been grown without the use of pesticides 18. Sustainable textiles: • Are cultivated and manufactured in eco-friendly or environmentally friendly ways • Little or no chemicals are used in the cultivation of the plants and production of the textiles • Renewable resources such as plants that require little water, but produce good yields, are used to manufacture these textiles 19. Organic textiles: • No harmful pesticides or weed-killer are used when cultivating organic textiles • No bleaching agents or chemical colourants are used during the manufacturing process • Natural plant dyes are used to colour textiles so that workers are not exposed to harmful toxic substances

GRADE 12 CONSUMER STUDIES TERMINOLOGY FOOD AND NUTRITION NUTRITIONAL AND FOOD-RELATED HEALTH CONDITIONS 1. Glycaemic index (GI): • GI ranks food on a scale from 0-100 according to their actual effect on blood glucose levels • Is the rate at which glucose is released into the blood stream 2. Blood glucose level: • The amount of glucose in the blood 3. Low blood glucose (hypoglycaemia): hypo means under • Is a condition in which the glucose level in the blood falls abnormally low 4. High blood glucose (hyperglycaemia): hype means over • is a condition in which the glucose level in the blood becomes abnormally high (GLYCAEMIA MEANS BLOOD GLUCOSE) 5. Diabetes: • Is a chronic disease in which the blood –glucose level is abnormally high because the body cannot control it properly • It is a disease in which the pancreas produces no insulin/little insulin or the body does not use insulin effectively • As a result there is excess glucose and the body cannot control it 6. Soluble fibre: • Fibre that dissolves to form a gel in water. It slows the entry of sugar (glucose) into the blood stream 7. Insoluble fibre: • Fibre that cannot be digested as it does not dissolve in water, but rather binds and holds water as it passes through the body 8. Cholesterol: • Cholesterol is a soft, white waxy substance produced in the liver and body cells. The liver produces all the cholesterol that the body needs 9. High blood cholesterol: • High levels of cholesterol in the blood can cause a build-up of fatty plaque on the inner walls of arteries, obstructing blood flow through the arteries 10. Atherosclerosis: • Is the clogging, narrowing and closing of arteries due to the build-up of cholesterol and other fatty substances in the walls of the arteries 11. Osteoporosis: (means porous bones) • Results from a low-calcium diet intake over a long period • Calcium is withdrawn from the bones at a faster rate than it is replaced • The bone gradually becomes smaller, thinner and so fragile that it breaks easily • This leads to an increase risk of fractures of hips, legs and wrists 12. Saturated fats: • Fats found mainly in animals and solid at room temperature

13. Unsaturated fats: • Fats found mainly in plants and liquid at room temperature 14. Hydrogenated/trans fats: • Hydrogenation is the process of converting vegetable oils into solids(fats) 15. Anaemia: • Is a condition in which the blood contains fewer red blood cells than normal in the blood or • lack of haemoglobin in the red blood cells due to shortage of iron, vitamin B12 and folic acid • It is due to lack of iron 16. High blood pressure (hypertension): • Is the condition that occurs when the blood in the arteries pump at a higher pressure than usual • Is the pressure of the blood against the artery walls is so high as it circulates through the body FOOD ALLERGIES AND INTOLERANCES 17. Food allergy: • Occurs when the immune system responds to a protein which it regards as harmful and acts against it. • It is a response to the immune system 18. Milk allergy: • Is caused when the immune system reacts to the milk proteins and regards it as harmful. This can be life threatening 19. Food intolerance: • Does not involve the immune system • Is a non-allergic hypersensitivity to a certain food, drink, food additives that causes particular symptoms in the body 20. Dairy/lactose intolerance: • The body lacks the enzyme lactase in the small intestine that breaks down milk sugars into glucose and galactose so that it can be absorbed into the blood stream • Is the inability to digest the lactose (sugar in milk) found in dairy products due to the lack of enzyme lactase 21. Gluten intolerance (Celiac disease): • Is an intestinal disorder that occurs when the body cannot tolerate gluten causing inflammation and long-term damage to the walls of the small intestine that causes the nutrients to pass through quickly without being absorbed (gluten is the protein found in oats, wheat, rye, barley)

EATING DISORDERS 22. Anorexia nervosa: • Is the restricted food intake to the point of excessive and dangerous weight loss • The victim literally starve themselves to death • Eating disorder that causes an obsession about body weight and diet with the fear of gaining weight 23. Bulimia nervosa: • It is when a person eats large amounts of food (binge eating) in a very short space of time and the gets rid of by vomiting or using laxative or drugs. 24. Obesity: • It is when the weight exceeds a standard based on height • Is a condition of excessive fatness to the extent that it has a harmful effect on health FOOD-BORNE DISEASES 25. Hepatitis A (infective jaundice) • Is a contagious liver disease that is caused by the hepatitis A virus 26. Tuberculosis (TB) • Is a serious, chronic bacterial infection affecting mostly lungs 27. E-coli infection: • Is a type of bacterium that is found in the digestive track (intestines) of healthy humans and animals and is usually harmless. Some E-coli cause infection of the intestine 28. Dysentery: • Is the diarrhoea in which the loose and watery stools containing visible blood. • It is an intestinal infection 29. Gastro-enteritis: • It is an inflammation that irritates the inner lining of the stomach in reaction to an infection caused by a virus, bacterium, toxic substances or medication FOOD ADDITIVES 30. Food additives: • Are substances (natural or artificial) added to foods during production to preserve or improve their flavour, texture or appearance 31. Nutrients: • Are substances found in food that performs a specific function in the body. Provide energy, build tissues and maintain basic health 32. Emulsifiers: • Allow oil and liquid to mix together to form permanent emulsion 33. Stabilisers: • Are added to foodstuff to achieve an even texture and to improve the appearance 34. Bleaches: • A bleaching agent is added to make flour to make it appear whiter as freshly milled flour has a yellowish tint 35. Colourants : • Natural or synthetic colourants are used to improve the appearance of food to make it more attractive 36. Chemical preservatives: • Preservatives prevent or slow down spoilage caused by micro-organisms.

• They inhibit or retard the growth of micro-organisms 37. Antioxidants: • Delay enzymatic browning in cut or peeled fruit and vegetables that are exposed to air • Prevent the oxidation that can lead to rancidity and discolouration 38. Additives: • Used to improve the flavour of food products that are commercially prepared GENETICALLY MODIFIED AND ORGANIC GROWN FOODS 39. Genetically modified food: • Genetic material from one organism is implanted into another organism in order to introduce characteristics from one species into another 40. Organic foods: • Are grown without artificial fertilisers, pesticides, herbicides, growth regulators and live-stock additives • It is produced through agricultural methods that sustain the health and productivity of eco- system 41. Food irradiation: • Is a technology that reduces or eliminate micro-organisms and insects in food • Improve the safety of food and extends their shelf life FOOD SECURITY 42. Food security: • It is when all people have access at all times to sufficient safe, nutritious food to maintain a healthy and active life 43. Self-sufficiency: • Farmers consume some of their own produce, therefore they are self –sufficient • People keep vegetable gardens or some poultry in order to produce some of their own foods • The country is able to provide food, through production or imports, to meet the basic needs of its population 44. Import: • To bring something in from another country 45. Export: • To send goods for sale or exchange to other countries

GRADE 12 CONSUMER STUDIES TERMINOLOGY HOUSING 1. Lessee/tenant: • It is the person that is renting a house of flat 2. Lessor/landlord: • Is the owner who lets out the property 3. Lease/lease agreement: • Is an agreement or contract between the landlord and tenant 4. Full title ownership/freehold: • The buyer becomes the legal owner of the entire property, the plot as well as the structure on it 5. Sectional title: • The buyer is the legal owner of a section of a housing complex but communal areas are jointly owned 6. Body corporate: • A group that controls, administers and manages a sectional title complex. Every owner in the sectional title complex is a member FINANCIAL AND CONTRACTUAL ASPECTS 7. Hidden costs: • Expense not normally included in the purchase price and buyers do not always take them into account 8. Rent: • Amount paid each month by the tenant to the landlord in order to stay in the accommodation 9. Levy: • Is a fee paid monthly to the body corporate for the maintenance of the building and common areas and security 10. Deposit: • This is the amount of money a buyer has to pay to contribute towards the purchase of the house 11. Bond: • Is a loan made to the owner of the property where the property is the security for the loan • Is the money the buyer borrows from a bank to buy property. This is paid back in monthly instalments, with interest, over a fixed period of time 12. Interest: • The money the bank charges for borrowing money 13. Offer to purchase agreement : • a document in which the buyer makes an offer to the seller and which contains the terms and conditions for the purchase and sale of property 14. Insurance: • This is life assurance to settle the home loan if something unexpected happens to the buyer • This type of insurance covers repayments if the bondholder is unable to pay the bond repayments as a result of death, retrenchment or disability • This means that the homeowner’s family will retain the ownership of the home in the case of death 15. Home owner’s insurance: • Short term insurance that protects the house against structural damage from fire, floods, other natural disasters and political unrest 16. Monthly repayments of bond:

• The owner of the house must pay the bank on monthly basis • Monthly repayments should not exceed between 25% and 30% of the homeowners’ monthly income • Monthly instalments are made over a long period of about 20-30 years 17. Fixed interest rates: • An interest rate that is fixed (does not change) over the agreed-upon period of time 18. Variable interest rates • A fluctuating interest rates based on the home loan lending rate as set by the SARS 19. Deed of sale agreement: • A formal written legal agreement between the buyer and seller, detailing the terms and conditions of the sale of a property 20. Collateral security: • Something pledged as security for the repayment of a loan (surrendering/ceasing the value of life insurance policy) • The value of the property /house serves as security for the money borrowed /loan TRANSFER AND HIDDEN COSTS 21. Transfer: • It is when the property rights are transferred legally to the buyer after the deed of sale (purchase contract) has been signed by both parties and the financing of the property has been approved by the bank 22. Transfer costs: • These are legal fees payable when a property is purchased, because the property rights are transferred from the seller to the buyer 23. Transfer duties: • These are taxes payable when ownership of the property is transferred to the buyer • The conveyance (property lawyer) pays this amount to SARS 24. Transfer/attorney/conveyance fees : • Transfer fees are also called conveyancing fees, are paid to the attorney who oversees the transfer process of the property 25. Conveyance/conveyancing attorney: • Is a lawyer who has specialised in property law 26. Title deed: • Is the legal document that proves that you are the owner of the property • It includes the location, size of property and well as the owner’s particulars 27. Deed office fees: • Fees paid to the deeds office for registration of the bond and title deed 28. Interim rates: • Refer to interest that has to be paid before the registration of the bond 29. Initiation fee: • The bank charges a once-off for preparing the documents and processing the loan application 30. Property valuation fee: • This fee is payable to the bank for the valuation of the peroperty 31. Property tax/rates: • The buyer is responsible for paying property tax from the date that the property is registered in his/her name 32. Occupational rent: • Should the buyer occupy the property before the bond is registered, occupational rent has to be paid to the seller 33. Administration fees:

• The bank charges a monthly fee on loans for residential property 34. Moving/current expenses: • This is the amount budgeted for removal company, and other related expense like new curtains, paint, carpeting etc. 35. Service connection fees/utility connection deposit: • A deposit paid to municipality for connecting services e.g. water, electricity and telephone 36. Variable costs of the attorney: • These costs include postage, electronic instruction fee and FICA fees HOUSING SUPPORT 37. Housing subsidy: • Is a grant that the government provides to qualifying beneficiaries (low income consumers) to help them to acquire housing 38. Employer support: • The government, all municipalities and many other employers offer a monthly housing subsidy or allowance to their employees • The employer helps the employee to pay the monthly instalment on a property that he/she has bought BUYING HOUSEHOLD APPLIANCES 1. Universal design: • Is the design of products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design • Products and environments that inherently accessible to older people, people without disabilities, and people with disabilities. 2. Instalment sale transaction (Hire purchase): • Consumers can buy expensive household appliances and furniture and pay for them in instalments over a period of time • The item can be taken home once the deposit has been paid and a contact has been signed by both parties • Extra costs include a deposit, administration fees, insurance charges and interest 3. Laybys: • Is an agreement between the buyer and the retailer • The consumer pays for an item in instalments and the retailer keeps the items until the whole amount is paid out 4. Credit account transaction: • When the price of the appliance is high and the consumer is unable it from one month’s income, goods can be purchase, goods can be purchased on account even clothes • The store sends the customer a statement of account with a balance owing • Consumers can buy repeatedly on their account • They must pay a minimum monthly amount • The payment should be paid promptly • There is a monthly spending limit 5. Bank credit card transaction: • Credit cards are issued out by bake to qualifying consumer • These cards can be used to buy anything in the shop • Interest rates on these cards are high and card holders must also pay bank administration costs 6. Cash transaction: • Consumers pay cash for when buying furniture or appliances • They are entitled to a discount and can choose which retailer to use

GRADE 12 CONSUMER STUDIES TERMINOLOGY THE CONSUMER FINANCIAL AND CONTRACTUAL ASPECTS CONSUMERS SHOULD TAKE NOTE OF: 1. Contract: • An agreement between two or more people in which one person offers to do something in return for a valuable benefit 2. Breach of contact: • When one party fails to perform the obligations specified in the contract, that party breaches the contract 3. Warranty: • Is a written guarantee promising to repair or replace an article if it breaks or does not work properly within a specified period 4. Guarantee: • Is an assurance that the product will remain in working order for a particular length of time • Is a promise from the manufacturer that they will sort out any problems with the or services within a specific fixed period of time 5. Grey goods/parallel imports • Are items that a manufacturer does not want sold in a particular country but end up there through unofficial distribution channels. It is not illegal • Are goods that have been imported into a country through unofficial or unauthorised distribution channels. These are not illegal goods they are imported into a country legally and necessary duties are paid • They are sold by individual or businesses that are not authorised by the manufacturer to do so 6. Direct marketing: • Is to approach someone in person or by mail or electronic communication, for the direct or indirect purpose of promoting or supplying goods in the ordinary course of business or requesting a donation 7. Cooling-off period: • Is the amount of time the law gives a consumer who has signed a contract to cancel it without a reason or financial implications 8. Exemption clauses: • Provision in a contract under which one party (usually the one which drafted the agreement) is protected from being sued by the other party for damages, loss, negligence, non-performance, etc. 9. Scams: • Are dishonest schemes • Involves an unsuspecting consumer who is cheated into paying an excessive for goods and services offered while there are no real goods or services • The consumer loses her money and get nothing in return 10. Stokvel: • Is a communal-based saving club • It consists of two or more people who agree to support each other in order to achieve a specific objective 11. Pyramid schemes: • Are “get-rich-quickly” money- making schemes that take the form of a pyramid. They promise participants payments just for enrolling other people into the scheme • Are an unsustainable business model in which members are paid to recruit new members, rather than to sell goods or services TAXES, INTEREST RATES AND INFLATION:

12. Income tax: • Is a tax levied on all income and profit that a tax payer receives including individuals, companies and trusts 13. VAT (Value Added Taxes): • Is added to the price of some goods and services sold by business. It is currently levied at 14%. All consumers pay VAT, regardless of their income 14. Excise duty (sin tax): • Is a tax placed on manufacture and sale of products such as alcohol and tobacco 15. Fuel levy: • Is a levy paid on every litre of petrol and diesel sold in South Africa. It includes a levy payable to the Road Accident Fund 16. Licences: • Licences, for which you have to pay fees, are also a form of tax e.g. drivers’ licences, TV licences etc. 17. Property taxes: • Tax paid by homeowners to the municipality and not to SARS. It is based on the value of the property 18. PAYE (Pay-as-you-earn) • Employers deduct tax from an employee’s monthly income and pay to SARS • The employer deducts one-twelfth of the estimated tax that the employee will pay at the end of the year 19. Provisional tax: • Tax payers whose income is not fixed/irregular, pay tax twice/two payments a year based on their estimated taxable income 20. Interest rates: • Is the rate at which borrowers pay interest for the money they borrowed from lenders • Interest rates are not fixed, but increase and decrease (fluctuate) as the demand for money changes 21. Repo rate: • Interest at which commercial banks can borrow money from the reserve bank 22. Simple interest: • It is calculated on the principal (original) amount. Interest will be added to the total amount that must be repaid every year 23. Compound interest: • It is when interest is charged or paid on the principal (original) amount plus the interest to date 24. Inflation: • Is the continuous increase in the price of goods and services that brings about a decrease in the purchasing power of money (inflation reduces the buying capacity of money) 25. Inflation rate: • Is the percentage at which the prices of goods and services increase in a year 26. Consumer price index (CPI): • Is the instrument used to calculate price increase and the inflation rate • It is used to measure changes in the economy as well as changes in the standard of living

GRADE 12 CONSUMER STUDIES TERMINOLOGY ENTREPRENEURSHIP 1. Entrepreneur: • A person who sells or produces products in order to make profit • A person who starts and manages his/her own business • A person who notices a gap/ recognises business opportunities within the market and transforms it into a successful and profitable business venture 2. Business plan: • A formal statement of what a business wants to accomplish and how it intends to accomplish it 3. Target market: • Is a specific group of people who would be interested on your products/services and purchase them • People who share the same characteristics e.g. gender, age, occupation, buying habits, income group and culture 4. Market research: • Is a planned and organised effort to get new knowledge/facts that will help the entrepreneur to make informed decisions about his/her product and marketing thereof • Is conducted to find out about the potential market and to identify what the market needs and wants are 5. Start –up capital: • Are costs/money needed to set up/start a business and to run it until it reaches the profit threshold 6. Start-up resources: • Material and human resources needed to start up a business 7. Profit threshold: (break-even point) • The point where total costs (expenses) and total sales (revenue) are equal. There is no net profit or loss • When the income equals the expenditure and the business shows no profit or loss • Is the minimum number of sales necessary to cover all expenses 8. Operating costs: • are costs paid out to run the business and to produce the product • costs of all extra expenditure to run the business 9. Product specification: • Are the standards that must be maintained in making a product • Detailed statement describing the product • Ensures that consumers will always get a good quality product regarding appearance, texture, taste, size 10. Quality control: • Is the process of inspecting products to ensure that the required standards are met 1

• Is the procedure for making sure that the quality of a product is maintained through inspection to meet the required standards 11. Sustainable production: • Using goods and services to improve the quality of life and meet basic needs of consumers without harming the environment 12. Profitable business: • A business that fulfils an unmet need in the market place and generates profit 13. Trade mark/name: • A specific identification that makes it easy to recognise and distinguish competitor’s products 14. Stock control: • Is the process of ensuring that the business does not run out of raw material • Is the process of ensuring that production will not be interrupted as a result of a shortage of raw material 15. Production costs: • Are the expenses that a business must pay in order to supply goods and services to its customers • Costs involved in the manufacturing and packaging of the product 16. Fixed costs: • Are the costs that remain the same regardless of how many products are made 17. Variable costs: • Are costs that are likely to change 18. Overheads: • These are the additional costs that must be paid in order for the business to operate 19. Efficient production: • Utilising material and human resources so that productivity is increased with little wastage 20. Selling price: • Production costs plus the profit 21. Mark up: • Is the percentage or amount that is added to the cost price to cover all the overheads expenses and still leave money over for a profit 22. Profit: • Is the reward the business owner receives for investing money in the business 23. Cash flow projection (forecast): • Is a document that shows the movement of money over a future/forecast period 24. Financial feasibility study: • A study of whether a business will be a success after taking into consideration its total costs and probable revenues 25. Sustainable profitability: • A business that is in production for a long period of time, covers all expenses and shows a profit 2

26. SWOT analysis: • A way to identify and analyse a company’s goals by assessing its strength, weakness, opportunities and threats 27. Gross salary: • Income/salary before deductions are made 28. Net salary: • Income/salary after deductions are made 29. Competitive edge: • A business that offers a better product than the local businesses 30. Work plan/implementation plan: • Is a document that states what tasks are to be done to achieve your goals, with reference to available time and human resources 31. Marketing mix: • Variables of product, place, people, promotion and price are five elements of marketing mix strategy that determines the success of the product in the market place 32. Marketing strategy: • A process that can allow an organisation to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage 3

GRADE 12 CONSUMER STUDIES TERMINOLOGY CLOTHING 1. Fashion: • Is a style of clothing that a specific group of people accept and wear at a given time and place 2. Style/Fashion style: • Is the specific characteristic that make one product or item different from another product of the same type • Differences or additions whereby similar products are distinguished from one another 3. Silhouette: • This is the outline of your body or a garment, which you can see from a distance, even before you notice the detail of the style 4. Classic styles: • Are styles that are continually accepted because they are timeless and tasteful 5. Fads: • Is a fashion with very short lifecycle • Is any style that catches on among a large group of people, it comes and goes very quickly • Items that suddenly become popular but disappear again just as quickly 6. Fashion/standard trends: • the directions in which the fashion moves • trends start, grow, evolve and decline gradually 7. Retrospective fashion: • Refers to clothes that imitate the style of the previous era • Fashion often looks to the past for inspiration 8. Contemporary fashion: • Is the style that many people accept and wear, manufactured in larger quantity and sold at low price 9. Haute couture/high fashion: • These are new, unique and exclusive styles that are created by fashion designer and expensive FASHION CYCLE 10. Introduction/launch/beginning stage 1: • Fashion is introduced • At this stage the fashion leaders accept or reject the style 11. Rise stage 2: • The fashion gains popularity as more people accept it 12. Peak stage 3: • The fashion reaches the height of its popularity and widely accepted by many people, many people wear it 4

13. Decline stage 4: • Boredom sets in and fashion declines as fewer and fewer people wear it, until no one wears it and it is marked down by shops 14. Obsolete/obsolescence stage 5: • Garments go out of fashion. At this stage a new fashion trend has been established • The fashion cycle is completed 15. Brand piracy: • When the product is given a name that is similar to that of a well-known brand deliberately so that consumers may mistake it for the actual brand name • Unauthorised use of protected trademarks, brand names or logo and the imitation of labels, packaging of products 16. Counterfeit: • Are replicas of the original product • An illegal copy of a product 17. Eco-fashion: • Clothing produced by methods that are not harmful to the environment • using organic raw material or recycled material • using material that has been grown without the use of pesticides 18. Sustainable textiles: • Are cultivated and manufactured in eco-friendly or environmentally friendly ways • Little or no chemicals are used in the cultivation of the plants and production of the textiles • Renewable resources such as plants that require little water, but produce good yields, are used to manufacture these textiles 19. Organic textiles: • No harmful pesticides or weed-killer are used when cultivating organic textiles • No bleaching agents or chemical colourants are used during the manufacturing process • Natural plant dyes are used to colour textiles so that workers are not exposed to harmful toxic substances 5

GRADE 12 CONSUMER STUDIES TERMINOLOGY FOOD AND NUTRITION NUTRITIONAL AND FOOD-RELATED HEALTH CONDITIONS 1. Glycaemic index (GI): • GI ranks food on a scale from 0-100 according to their actual effect on blood glucose levels • Is the rate at which glucose is released into the blood stream 2. Blood glucose level: • The amount of glucose in the blood 3. Low blood glucose (hypoglycaemia): hypo means under • Is a condition in which the glucose level in the blood falls abnormally low 4. High blood glucose (hyperglycaemia): hype means over • is a condition in which the glucose level in the blood becomes abnormally high (GLYCAEMIA MEANS BLOOD GLUCOSE) 5. Diabetes: • Is a chronic disease in which the blood –glucose level is abnormally high because the body cannot control it properly • It is a disease in which the pancreas produces no insulin/little insulin or the body does not use insulin effectively • As a result there is excess glucose and the body cannot control it 6. Soluble fibre: • Fibre that dissolves to form a gel in water. It slows the entry of sugar (glucose) into the blood stream 7. Insoluble fibre: • Fibre that cannot be digested as it does not dissolve in water, but rather binds and holds water as it passes through the body 8. Cholesterol: • Cholesterol is a soft, white waxy substance produced in the liver and body cells. The liver produces all the cholesterol that the body needs 9. High blood cholesterol: • High levels of cholesterol in the blood can cause a build-up of fatty plaque on the inner walls of arteries, obstructing blood flow through the arteries 10. Atherosclerosis: • Is the clogging, narrowing and closing of arteries due to the build-up of cholesterol and other fatty substances in the walls of the arteries 11. Osteoporosis: (means porous bones) • Results from a low-calcium diet intake over a long period • Calcium is withdrawn from the bones at a faster rate than it is replaced • The bone gradually becomes smaller, thinner and so fragile that it breaks easily • This leads to an increase risk of fractures of hips, legs and wrists 6

12. Saturated fats: • Fats found mainly in animals and solid at room temperature 13. Unsaturated fats: • Fats found mainly in plants and liquid at room temperature 14. Hydrogenated/trans fats: • Hydrogenation is the process of converting vegetable oils into solids(fats) 15. Anaemia: • Is a condition in which the blood contains fewer red blood cells than normal in the blood or • lack of haemoglobin in the red blood cells due to shortage of iron, vitamin B12 and folic acid • It is due to lack of iron 16. High blood pressure (hypertension): • Is the condition that occurs when the blood in the arteries pump at a higher pressure than usual • Is the pressure of the blood against the artery walls is so high as it circulates through the body FOOD ALLERGIES AND INTOLERANCES 17. Food allergy: • Occurs when the immune system responds to a protein which it regards as harmful and acts against it. • It is a response to the immune system 18. Milk allergy: • Is caused when the immune system reacts to the milk proteins and regards it as harmful. This can be life threatening 19. Food intolerance: • Does not involve the immune system • Is a non-allergic hypersensitivity to a certain food, drink, food additives that causes particular symptoms in the body 20. Dairy/lactose intolerance: • The body lacks the enzyme lactase in the small intestine that breaks down milk sugars into glucose and galactose so that it can be absorbed into the blood stream • Is the inability to digest the lactose (sugar in milk) found in dairy products due to the lack of enzyme lactase 21. Gluten intolerance (Celiac disease): • Is an intestinal disorder that occurs when the body cannot tolerate gluten causing inflammation and long-term damage to the walls of the small intestine that causes the nutrients to pass through quickly without being absorbed (gluten is the protein found in oats, wheat, rye, barley) 7

EATING DISORDERS 22. Anorexia nervosa: • Is the restricted food intake to the point of excessive and dangerous weight loss • The victim literally starve themselves to death • Eating disorder that causes an obsession about body weight and diet with the fear of gaining weight 23. Bulimia nervosa: • It is when a person eats large amounts of food (binge eating) in a very short space of time and the gets rid of by vomiting or using laxative or drugs. 24. Obesity: • It is when the weight exceeds a standard based on height • Is a condition of excessive fatness to the extent that it has a harmful effect on health FOOD-BORNE DISEASES 25. Hepatitis A (infective jaundice) • Is a contagious liver disease that is caused by the hepatitis A virus 26. Tuberculosis (TB) • Is a serious, chronic bacterial infection affecting mostly lungs 27. E-coli infection: • Is a type of bacterium that is found in the digestive track (intestines) of healthy humans and animals and is usually harmless. Some E-coli cause infection of the intestine 28. Dysentery: • Is the diarrhoea in which the loose and watery stools containing visible blood. • It is an intestinal infection 29. Gastro-enteritis: • It is an inflammation that irritates the inner lining of the stomach in reaction to an infection caused by a virus, bacterium, toxic substances or medication FOOD ADDITIVES 30. Food additives: • Are substances (natural or artificial) added to foods during production to preserve or improve their flavour, texture or appearance 31. Nutrients: • Are substances found in food that performs a specific function in the body. Provide energy, build tissues and maintain basic health 32. Emulsifiers: • Allow oil and liquid to mix together to form permanent emulsion 33. Stabilisers: • Are added to foodstuff to achieve an even texture and to improve the appearance 8

34. Bleaches: • A bleaching agent is added to make flour to make it appear whiter as freshly milled flour has a yellowish tint 35. Colourants : • Natural or synthetic colourants are used to improve the appearance of food to make it more attractive 36. Chemical preservatives: • Preservatives prevent or slow down spoilage caused by micro-organisms. • They inhibit or retard the growth of micro-organisms 37. Antioxidants: • Delay enzymatic browning in cut or peeled fruit and vegetables that are exposed to air • Prevent the oxidation that can lead to rancidity and discolouration 38. Additives: • Used to improve the flavour of food products that are commercially prepared GENETICALLY MODIFIED AND ORGANIC GROWN FOODS 39. Genetically modified food: • Genetic material from one organism is implanted into another organism in order to introduce characteristics from one species into another 40. Organic foods: • Are grown without artificial fertilisers, pesticides, herbicides, growth regulators and live-stock additives • It is produced through agricultural methods that sustain the health and productivity of eco-system 41. Food irradiation: • Is a technology that reduces or eliminate micro-organisms and insects in food • Improve the safety of food and extends their shelf life FOOD SECURITY 42. Food security: • It is when all people have access at all times to sufficient safe, nutritious food to maintain a healthy and active life 43. Self-sufficiency: • Farmers consume some of their own produce, therefore they are self –sufficient • People keep vegetable gardens or some poultry in order to produce some of their own foods • The country is able to provide food, through production or imports, to meet the basic needs of its population 44. Import: • To bring something in from another country 45. Export: • To send goods for sale or exchange to other countries 9

GRADE 12 CONSUMER STUDIES TERMINOLOGY HOUSING 1. Lessee/tenant: • It is the person that is renting a house of flat 2. Lessor/landlord: • Is the owner who lets out the property 3. Lease/lease agreement: • Is an agreement or contract between the landlord and tenant 4. Full title ownership/freehold: • The buyer becomes the legal owner of the entire property, the plot as well as the structure on it 5. Sectional title: • The buyer is the legal owner of a section of a housing complex but communal areas are jointly owned 6. Body corporate: • A group that controls, administers and manages a sectional title complex. Every owner in the sectional title complex is a member FINANCIAL AND CONTRACTUAL ASPECTS 7. Hidden costs: • Expense not normally included in the purchase price and buyers do not always take them into account 8. Rent: • Amount paid each month by the tenant to the landlord in order to stay in the accommodation 9. Levy: • Is a fee paid monthly to the body corporate for the maintenance of the building and common areas and security 10. Deposit: • This is the amount of money a buyer has to pay to contribute towards the purchase of the house 11. Bond: • Is a loan made to the owner of the property where the property is the security for the loan • Is the money the buyer borrows from a bank to buy property. This is paid back in monthly instalments, with interest, over a fixed period of time 12. Interest: • The money the bank charges for borrowing money 13. Offer to purchase agreement : • a document in which the buyer makes an offer to the seller and which contains the terms and conditions for the purchase and sale of property 10

14. Insurance: • This is life assurance to settle the home loan if something unexpected happens to the buyer • This type of insurance covers repayments if the bondholder is unable to pay the bond repayments as a result of death, retrenchment or disability • This means that the homeowner’s family will retain the ownership of the home in the case of death 15. Home owner’s insurance: • Short term insurance that protects the house against structural damage from fire, floods, other natural disasters and political unrest 16. Monthly repayments of bond: • The owner of the house must pay the bank on monthly basis • Monthly repayments should not exceed between 25% and 30% of the homeowners’ monthly income • Monthly instalments are made over a long period of about 20-30 years 17. Fixed interest rates: • An interest rate that is fixed (does not change) over the agreed-upon period of time 18. Variable interest rates • A fluctuating interest rates based on the home loan lending rate as set by the SARS 19. Deed of sale agreement: • A formal written legal agreement between the buyer and seller, detailing the terms and conditions of the sale of a property 20. Collateral security: • Something pledged as security for the repayment of a loan (surrendering/ceasing the value of life insurance policy) • The value of the property /house serves as security for the money borrowed /loan TRANSFER AND HIDDEN COSTS 21. Transfer: • It is when the property rights are transferred legally to the buyer after the deed of sale (purchase contract) has been signed by both parties and the financing of the property has been approved by the bank 22. Transfer costs: • These are legal fees payable when a property is purchased, because the property rights are transferred from the seller to the buyer 23. Transfer duties: • These are taxes payable when ownership of the property is transferred to the buyer • The conveyance (property lawyer) pays this amount to SARS 24. Transfer/attorney/conveyance fees : 11

• Transfer fees are also called conveyancing fees, are paid to the attorney who oversees the transfer process of the property 25. Conveyance/conveyancing attorney: • Is a lawyer who has specialised in property law 26. Title deed: • Is the legal document that proves that you are the owner of the property • It includes the location, size of property and well as the owner’s particulars 27. Deed office fees: • Fees paid to the deeds office for registration of the bond and title deed 28. Interim rates: • Refer to interest that has to be paid before the registration of the bond 29. Initiation fee: • The bank charges a once-off for preparing the documents and processing the loan application 30. Property valuation fee: • This fee is payable to the bank for the valuation of the peroperty 31. Property tax/rates: • The buyer is responsible for paying property tax from the date that the property is registered in his/her name 32. Occupational rent: • Should the buyer occupy the property before the bond is registered, occupational rent has to be paid to the seller 33. Administration fees: • The bank charges a monthly fee on loans for residential property 34. Moving/current expenses: • This is the amount budgeted for removal company, and other related expense like new curtains, paint, carpeting etc. 35. Service connection fees/utility connection deposit: • A deposit paid to municipality for connecting services e.g. water, electricity and telephone 36. Variable costs of the attorney: • These costs include postage, electronic instruction fee and FICA fees HOUSING SUPPORT 37. Housing subsidy: • Is a grant that the government provides to qualifying beneficiaries (low income consumers) to help them to acquire housing 38. Employer support: • The government, all municipalities and many other employers offer a monthly housing subsidy or allowance to their employees • The employer helps the employee to pay the monthly instalment on a property that he/she has bought 12

BUYING HOUSEHOLD APPLIANCES 1. Universal design: • Is the design of products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design • Products and environments that inherently accessible to older people, people without disabilities, and people with disabilities. 2. Instalment sale transaction (Hire purchase): • Consumers can buy expensive household appliances and furniture and pay for them in instalments over a period of time • The item can be taken home once the deposit has been paid and a contact has been signed by both parties • Extra costs include a deposit, administration fees, insurance charges and interest 3. Laybys: • Is an agreement between the buyer and the retailer • The consumer pays for an item in instalments and the retailer keeps the items until the whole amount is paid out 4. Credit account transaction: • When the price of the appliance is high and the consumer is unable it from one month’s income, goods can be purchase, goods can be purchased on account even clothes • The store sends the customer a statement of account with a balance owing • Consumers can buy repeatedly on their account • They must pay a minimum monthly amount • The payment should be paid promptly • There is a monthly spending limit 5. Bank credit card transaction: • Credit cards are issued out by bake to qualifying consumer • These cards can be used to buy anything in the shop • Interest rates on these cards are high and card holders must also pay bank administration costs 6. Cash transaction: • Consumers pay cash for when buying furniture or appliances • They are entitled to a discount and can choose which retailer to use 13

GRADE 12 CONSUMER STUDIES TERMINOLOGY THE CONSUMER FINANCIAL AND CONTRACTUAL ASPECTS CONSUMERS SHOULD TAKE NOTE OF: 1. Contract: • An agreement between two or more people in which one person offers to do something in return for a valuable benefit 2. Breach of contact: • When one party fails to perform the obligations specified in the contract, that party breaches the contract 3. Warranty: • Is a written guarantee promising to repair or replace an article if it breaks or does not work properly within a specified period 4. Guarantee: • Is an assurance that the product will remain in working order for a particular length of time • Is a promise from the manufacturer that they will sort out any problems with the or services within a specific fixed period of time 5. Grey goods/parallel imports • Are items that a manufacturer does not want sold in a particular country but end up there through unofficial distribution channels. It is not illegal • Are goods that have been imported into a country through unofficial or unauthorised distribution channels. These are not illegal goods they are imported into a country legally and necessary duties are paid • They are sold by individual or businesses that are not authorised by the manufacturer to do so 6. Direct marketing: • Is to approach someone in person or by mail or electronic communication, for the direct or indirect purpose of promoting or supplying goods in the ordinary course of business or requesting a donation 7. Cooling-off period: • Is the amount of time the law gives a consumer who has signed a contract to cancel it without a reason or financial implications 8. Exemption clauses: • Provision in a contract under which one party (usually the one which drafted the agreement) is protected from being sued by the other party for damages, loss, negligence, non-performance, etc. 9. Scams: 14

• Are dishonest schemes • Involves an unsuspecting consumer who is cheated into paying an excessive for goods and services offered while there are no real goods or services • The consumer loses her money and get nothing in return 10. Stokvel: • Is a communal-based saving club • It consists of two or more people who agree to support each other in order to achieve a specific objective 11. Pyramid schemes: • Are “get-rich-quickly” money- making schemes that take the form of a pyramid. They promise participants payments just for enrolling other people into the scheme • Are an unsustainable business model in which members are paid to recruit new members, rather than to sell goods or services TAXES, INTEREST RATES AND INFLATION: 12. Income tax: • Is a tax levied on all income and profit that a tax payer receives including individuals, companies and trusts 13. VAT (Value Added Taxes): • Is added to the price of some goods and services sold by business. It is currently levied at 14%. All consumers pay VAT, regardless of their income 14. Excise duty (sin tax): • Is a tax placed on manufacture and sale of products such as alcohol and tobacco 15. Fuel levy: • Is a levy paid on every litre of petrol and diesel sold in South Africa. It includes a levy payable to the Road Accident Fund 16. Licences: • Licences, for which you have to pay fees, are also a form of tax e.g. drivers’ licences, TV licences etc. 17. Property taxes: • Tax paid by homeowners to the municipality and not to SARS. It is based on the value of the property 18. PAYE (Pay-as-you-earn) • Employers deduct tax from an employee’s monthly income and pay to SARS • The employer deducts one-twelfth of the estimated tax that the employee will pay at the end of the year 19. Provisional tax: • Tax payers whose income is not fixed/irregular, pay tax twice/two payments a year based on their estimated taxable income 20. Interest rates: • Is the rate at which borrowers pay interest for the money they borrowed from lenders • Interest rates are not fixed, but increase and decrease (fluctuate) as the demand for money changes 15

21. Repo rate: • Interest at which commercial banks can borrow money from the reserve bank 22. Simple interest: • It is calculated on the principal (original) amount. Interest will be added to the total amount that must be repaid every year 23. Compound interest: • It is when interest is charged or paid on the principal (original) amount plus the interest to date 24. Inflation: • Is the continuous increase in the price of goods and services that brings about a decrease in the purchasing power of money (inflation reduces the buying capacity of money) 25. Inflation rate: • Is the percentage at which the prices of goods and services increase in a year 26. Consumer price index (CPI): • Is the instrument used to calculate price increase and the inflation rate • It is used to measure changes in the economy as well as changes in the standard of living 16