Ch 6 Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

The average used car costs about _______ less than the average new car. $0 $1,000 $10,000 $25,000 $50,000

$10,000

class-action suit

A legal action taken by a few individuals on behalf of all the people who have suffered the same alleged injustice.

service contract

An agreement between a business and a consumer to cover the repair costs of a product.

Sally has a major problem with a product and thinks that many others have had the same problem. Which of the following is the best way to resolve the problem? Class action lawsuit A lawyer A legal aid society Prepaid legal service Small claims court

Class action lawsuit

According to the diagram in the video, what is the title of step 3 in the consumer complaint process? Legal Action Consumer Agency Assistance Initial Communication Final Opportunity before Legal Action Communication with the Company

Consumer Agency Assistance

Use the following data: (see page 199) Purchase Costs Leasing Costs Down payment: $4,800 Security deposit: $1,600 Loan payment: $1,440 for 48mo Lease payment: $1,440 for 48mo Est. value at end of loan: $5,100 End-of-lease charges: $765 Opportunity cost interest rate: 2 percent Calculate the costs of buying versus leasing a motor vehicle. Cost of buying $ Cost of leasing $

Cost of buying $69204 Cost of leasing $70013

A fixed operating cost for a vehicle is Depreciation. Gasoline and oil. Maintenance and repairs. Parking. Tires.

Depreciation.

Which of the following is a disadvantage of leasing a car that is mentioned in the video? A large down payment may be required. Individuals don't have ownership in the vehicle and they must return it to the leasing company at the end of the lease. There are higher monthly payments. Individuals may not be able to afford the car they really want. All of the above are disadvantages of leasing a car.

Individuals don't have ownership in the vehicle and they must return it to the leasing company at the end of the lease.

Which of the following is involved in step two of the flowchart in the video for wise online buying activities? Individuals should read labels and warranty information. Individuals should examine consumer review sites to see what others have said about a product or service. Individuals should make the purchase. Individuals should compare both brick-and-mortar stores and online merchants. Individuals should compare brands and features.

Individuals should compare both brick-and-mortar stores and online merchants.

The dealer's cost is also known as the Invoice price. Sticker price. Set price. Capitalized cost. Residual value.

Invoice price.

A variable operating cost for a vehicle is Depreciation. Insurance. Interest on an auto loan. License and registration. Maintenance and repairs.

Maintenance and repairs.

A process used to settle grievances in a nonbinding process is called a(n) Arbitration. County health department. Lawsuit. Mediation. All of these are correct.

Mediation.

A partial refund of the price of a product is called a Coupon Open dating Rebate Unit pricing Warranty

Rebate

mediation

The attempt by an impartial third party to resolve a difference between two parties through discussion and negotiation.

All of the following are involved in the first step of the consumer complaint process discussed in the video, except: The consumer should provide a detailed explanation of the problem. The consumer should be pleasant, but firm and determined to find a solution. The consumer should return to the place of purchase and talk to an employee or manager. The consumer should provide a suggested remedy for the problem.

The consumer should provide a suggested remedy for the problem.

arbitration

The settlement of a difference by a third party whose decisions is legally binding.

Use the following data: Down payment (to finance vehicle) $5,800 Down payment for lease $2,100 Monthly loan payment $ 810 Monthly lease payment $620 Length of loan 48 months Length of lease 48 months Value of vehicle at end of loan $10,800 End-of-lease charges $1,050 a. What is the total cash outflow for buying and for leasing a motor vehicle with a cash price of $34,000? Total Cash Outflow Buying $______ Leasing $______ b. Based on your answers in part a, would you recommend buying or leasing? Buying Leasing

Total Cash Outflow Buying $33,880 Leasing $32,910 recommend Leasing

This is a written guarantee from the manufacturer that specifies the conditions under which the product can be returned, replaced, or repaired. Coupon Open dating Rebate Unit pricing Warranty

Warranty

Chris is trying to decide which laundry detergent to purchase for his wife, Haley. Exhibit 1 is priced at $10.98 for 100 ounces. Exhibit 2 is priced at $13.97 for 150 ounces. What is the unit price of Exhibit 2? $9.31 per ounce $10.98 per ounce $0.09 per ounce $0.10 per ounce $0.11 per ounce

$0.09 per ounce ------------------------ Unit Price for Exhibit 2 = Price/Quantity = $13.97/150 ounces = $0.09 per ounce

What would be the net present value of a microwave oven that costs $175 and will save you $84 a year in time and food away from home? Assume an average return on your savings of 5 percent for 6 years. (Hint: Calculate the present value of the annual savings, then subtract the cost of the microwave.) Use Exhibit 1-D. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Net present value $_____

$251.38 --------------- 84 x 5.076 - 175 = 251.384 round 251.38

According to the video, what is a way to practice wise purchasing strategies? Consumers can choose a specific type of retailer in order to obtain better prices. Consumers can time their purchases in order to take advantage of sales. Consumers can utilize a purchasing agent to determine the best prices. A and B A, B, and C

A and B

small claims court

A court that settles legal differences involving amounts below a set limit and employs a process in which the litigants usually do not use a lawyer.

While evaluating alternatives, comparison shopping will be beneficial for buying all of the following except A hot dog at the baseball park. Milk and bread that you buy often. A camera. Musical instrument accessories that you purchase online. An expensive television.

A hot dog at the baseball park.

warranty

A written guarantee from the manufacturer or distributor of a product that specifies the conditions under which the product can be returned replaced, or repaired.

What are some of the legal actions that consumers can take that are discussed in the video? Consumers can file or become a participant in a class-action lawsuit. Consumers can bring their claims to a small claims court. Consumers can consult with a lawyer. B and C A, B, and C

A, B, and C

John Walters is comparing the cost of credit to the cash price of an item. If John makes a down payment of $95 and pays $35 a month for 24 months, how much more will that amount be than the cash price of $699? Amount $

Amount $236 ---------------- 95 + (35x24) = 935 935 - 699 = 236

According to the end of the video, the decision to buy or lease an automobile is a __________________ decision. Relaxed Easy Obvious Straightforward Difficult

Difficult

According to the video, _________________ is unplanned buying with little investigation of alternative stores, brands, or prices, whereas, _________________ is the process of considering alternative stores, brands, and prices. Comparison shopping; impulse buying Impulse buying, comparison shopping Influenced buying; substitute shopping Substitute shopping; influenced buying Influenced buying; opportunity shopping

Impulse buying, comparison shopping

The text identifies several phases in the research-based buying process. The correct order of the phases is Evaluating alternatives, preshopping activities, selection and purchase, postpurchase activities. Preshopping activities, selection and purchase, evaluating alternatives, postpurchase activities. Preshopping activities, evaluating alternatives, selection and purchase, postpurchase activities. Postpurchase activities, evaluating alternatives, preshopping activities, selection and purchase. Evaluating alternatives, selection and purchase, preshopping activities, postpurchase activities.

Preshopping activities, evaluating alternatives, selection and purchase, postpurchase activities.

Which of the following is an advantage of buying a car compared to leasing that is mentioned in the video? There are not any additional costs incurred for extra mileage. There is a small security deposit. There are lower monthly payments A, B, and C None of the above is an advantage of buying a car that is mentioned in the video.

There are not any additional costs incurred for extra mileage.

According to the diagram in the video, which of the following is involved in step four? Individuals should delete all emails from the company for future reference. Individuals should keep receipts, warranty information, and other documents for the product or service you purchased. Individuals should post on the company's social media sites. A and B B and C

Individuals should keep receipts, warranty information, and other documents for the product or service you purchased.

Calculate the unit price of each of the following items: (Enter your answers in cents rounded to 2 decimal places.) a. Motor oil—2.0 quarts for $1.28 ___cents/quart b. Cereal—15 ounces for $4.65 ___cents/ounce c. Canned fruit—13 ounces for 80 cents ___cents/ounce d. Facial tissue—300 tissues for $1.90 ___cents/100 tissues

64.00 cents/quart 31.00 cents/ounce 6.15 cents/ounce 63.33 cents/100 tissues ------------------------ ex. 128/2.0 = 64.00 465/15 = 31.00 80/13 = 6.15 190/300 = 63.33

All of the following are things to remember if you decide to purchase a product or service online based on the video, except: Individuals should search Google for discount offers on products or services. Individuals should search Google for free products and services. Individuals should use a secure buying website to protect against identity theft. Individuals should search Google for free shipping codes on products or services. Individuals should use a secure buying website to prevent a hacker from obtaining their credit or debit card information.

Individuals should search Google for free products and services.

legal aid society

One of a network of publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney.