Chapter 8

Most used cars bought from private owners have NO:

express warranty

The sticker price of a car refers to:

the suggested retail price of a new car.

The purpose of small claims court is to:

handle legal disputes involving minor amounts

When comparing prices, remember that ready-to-use products have:

higher prices

A motor vehicle has annual depreciation of $1,600; oil changes cost $140, automobile insurance $700 annually, and license plates costs $100. What is the annual amount of the total fixed operating cost for this vehicle?

$2,400 (everything except oil)

To determine the true cost of credit for a new car, consider both the finance charge and the:

APR

Which of the following is true of automobile service contracts? Automobile service contracts are warranties. Automobile service contracts are free. Automobile service contracts can cover repairs not included in the manufacturer's warranty. Automobile service contracts are always a wise financial decision.

Automobile service contracts can cover repairs not included in the manufacturer's warranty

Emily is trying to decide whether to lease or buy a car. Which one of the following is NOT a factor necessary in making the comparison? Monthly lease payments Gasoline costs Residual value Mileage overage charges Down payment

Gasoline costs

Which of the following is not a social factor that would influence a consumer buyer's decision? Hobbies Lifestyle Culture Peer group Marital status

Marital status

Damian Walker just purchased a new vehicle. He is reading his owner's manual to know when he needs to take it in for its regular servicing at the dealer. He wants to make sure this car lasts a while. What step in the purchasing process is Damian carrying out?

Post-purchase activities

A used car sold "as is" has:

an implied warranty of merchantability

Private label products are those that:

are sold by one chain of stores.

Recently, Jim Walker was on a bus tour in a mountainous area. The bus broke down forcing the group to stay overnight. Group members had to pay for their own hotel bills. Jim believes that the hotel cost for the group should be paid by the tour company. Which legal action would be most appropriate?

class-action suit

___________ are nonprofit organizations organized by member-owners to save money on various products and services. Their prices are usually lower than at other retailers.

cooperatives

Paul Spoon has noticed that interest rates have risen in recent months. He is worried that this may make it more difficult for him to finance the purchase of a car. This would be an example of a(n) ________ factor that influences his purchasing decision.

economic

Consumer information necessary for wise purchasing decisions, such as websites or radio, is commonly provided by:

media sources

Gina Raffetto's car broke down on the way to work, and her mechanic has told her that the car cannot be fixed. Gina drives 30 miles one way to work each day. There is no reliable bus or train transportation that goes anywhere near her work. Gina decides she needs a car for reliable transportation to work. What step in the purchasing process is Gina carrying out?

problem identification

The main purpose of the Edmund's Used Car Prices is to:

provide current used-car prices

____________ is considered a variable operating cost of an automobile.

repairs and maintenance

The main purpose of Consumers Union is to:

report the quality of products and services

The expected value of a vehicle at the end of a lease is called the:

residual value

Most consumer complaints are resolved by:

returning to the original sales location

The items produced for a specific retail chain of stores are commonly sold under a ____________ brand.

store

The Sears Kenmore dishwasher is an example of a: (_____ brand)

store brand

Federal Trade Commission (FTC) regulations require that:

used car buyers be informed of whether or not the vehicle comes with a warranty

Howard Ramsell recently became aware of implied warranties that exist for consumer purchases. An implied warranty exists as a result of:

the intended use of a product

An example of a financial services cooperative is a:

credit union

Sally Nash has decided she needs a new car. After doing some research, she has settled on a midsized four door sedan. She likes the Honda Accord and is exploring the features she needs and wants on this car. She is also trying to decide whether she would be better off purchasing a new car, a used car, or leasing a car. She knows that if she purchases it new it would likely last her for many, many years. On the other hand a used car would be a lot cheaper. She is not sure a lease is for her because of the mileage requirements. What step in the purchasing process is Sally carrying out?

Evaluating alternatives

Which of the following statements about a legal aid society is NOT true? It is a branch of the American Bar Association. It provides legal assistance to people who cannot afford their own attorney. It is part of a network of community law offices. It provides legal assistance at minimal cost or without charge. It is a publicly supported organization.

It is a branch of the American Bar Association.

Which one of the following is the best example of a personal opportunity cost associated with a consumer purchase? Enjoyment derived from owning an item Taxes paid on purchases Money spent by stores on advertising Time and effort spent on comparison shopping

Time and effort spent on comparison shopping

Which of the following is LEAST likely to assist you in timing purchases to help you obtain bargains? Changing economic conditions Time zones Weather reports Political conflicts around the world

Time zones

An online buying club requires an annual fee of $45 in order to qualify for a 15 percent discount on purchases. What amount would a person have to buy in order to save enough to cover the cost of the membership?

$45/0.15= $300

An implied warranty of merchantability guarantees that: - a toaster must toast bread. - a used car must come with a radio. - a new car must come with a MP3 player.

a toaster must toast bread

Which type of government agency provides educational programs to assist consumers with buying decisions?

federal