Ch. 6 Skills Check

Which of the following is NOT true concerning small claims court? You can generally sue in small claims courts for amounts ranging between $2,500 and $5,000. You usually do not need an attorney in small claims court. You should use witnesses who can testify on your behalf in small claims court. You can generally sue for as much as $100,000 in small claims court.

You can generally sue for as much as $100,000 in small claims court.

The information on the label of some food products includes _______ dating that helps the consumer determine freshness or shelf life of a perishable product.

open/expiration

Which of the following is NOT true? A limited warranty may cover parts but not labor or shipping costs. A limited warranty states that a defective product can be fixed or replaced within a certain time. An express warranty is usually in writing and created by the seller. A full warranty states that a defective product can be fixed or replaced during a reasonable amount of time.

A limited warranty states that a defective product can be fixed or replaced within a certain time.

Select all that apply Which of the following are techniques that you should avoid when purchasing a vehicle? A. Low balling B. Asking how much can you afford per month C. Being asked how many months you want to finance. D. Leaving a deposit to hold the vehicle E. Highballing

A, B, D, E

Select all that apply Which of the following are drawbacks of leasing an automobile? A. Costs incurred for extra mileage B. Smaller cash outflow than buying C. No ownership interest in the vehicle D. Costs incurred for certain repairs

A, C, D

Select all that apply Which items below are used in determining the cost of an automobile lease? A. Manufacturer rebates B. Sticker price for the vehicle C. Capitalized cost D. Residual value - the projected value at the end of the lease E. The monthly payments and the number of months F. Money factor----the interest rate paid on the capitalized cost G. Interest rates on a new car loan from both the bank and the dealer

A, C, D, E, F

If a 10 pound bag of dog food sells for $6.99, what is the per unit cost of the dog food? Almost $0.70 per pound $69.99 per 10 pound bag About $0.40 per ounce About $10.00 per pound

Almost $0.70 per pound

If you cannot resolve a complaint at the local level, then you should next express your concern to customer service where? To the government At the corporate level At your state's university

At the corporate level

Select all that apply An individual would benefit from comparison shopping when wanting to purchase which of the following types of products and/or in which of the following situations? A. Low-cost products B. Products where quality differs greatly among sellers C. Simple products that are seldom purchased D. Expensive or complex products E. Products that are sold by many different sellers at various prices

B, D, E

Which of the following is NOT true regarding class-action suits? All parties must be notified in a class-action suit. An example of a class action is investors suing a brokerage company that executed unauthorized transactions for high commissions. A class-action suit is where a few people bring legal action on behalf of all the people impacted. People impacted by a bad product must participate in a class action and not sue on their own.

People impacted by a bad product must participate in a class action and not sue on their own.

Which of the following is true regarding comparison shopping for used vehicles? New-car dealers offer late-model vehicles that are usually lower priced than at other sources Used-car superstores usually have very limited inventories Warranties offered by used-car dealers are usually limited Most consumer protection regulations apply to private-party sales

Warranties offered by used-car dealers are usually limited

Product labels on appliances include information on operating ____ to assist you in selecting the most energy-efficient models.

costs

Select all that apply Which of the following automobile costs are variable costs? A. Repairs B. Interest on car loans C. Insurance D. Parking costs and tolls E. Registration fees F. Oil G. Gas

A, D, F, G

Which of the following is a guideline for avoiding being taken by deceptive business practices? Be cautious of offerings that seem too good to be true Sign contracts quickly in order to get a good deal before it expires Do business with companies that are located close to your home Make the deal immediately after you locate it so that it does not disappear

Be cautious of offerings that seem too good to be true

Which of the following is NOT a guideline for avoiding being taken by deceptive business practices? Compare costs of buying on credit with paying cash Avoid signing contracts you do not understand Do not hesitate to act quickly if a deal seems just too good to pass up Do business only with reputable companies

Do not hesitate to act quickly if a deal seems just too good to pass up

True or false: A full warranty covers only certain aspects of the product and requires the buyer to share in the cost of repairs or shipping.

False

The two key sources of current used-car prices in the United States are Edmund's Used Car Prices and ______ Blue Book.

Kelley

Which of the following would be included in Phase 3, Selection and Purchase, of the decision-making process for making major buying decisions? Proper maintenance and operation Negotiation activities to obtain a lower price Problem identification Comparison shopping activities

Negotiation activities to obtain a lower price

Which of the following is the first phase in a planned decision-making process? Preshopping activities Evaluating alternatives Postpurchase activities Selection and purchase

Preshopping activities

Which of the following items is NOT a factor in the cost of a lease of an automobile? Residual value Monthly payments and number of months Capitalized cost Price of accessories

Price of accessories

A car with a total purchase price of $12,000 is available while a comparable model can be leased for $350 a month for 36 months with end-of-lease costs of $800. Which arrangement should you choose? The outright purchase because its cost is lower. The lease because the cost is lower.

The outright purchase because its cost is lower.

Which of the following is an example of a limited warranty? The parts for your air conditioner will be replaced during the warranty period if damaged, but you will pay for the labor. Your air conditioner is covered for its intended use though this is not in writing. The seller has the right to sell you the air conditioner. Your air conditioner will be replaced at no charge at all to you if damaged during the warranty period.

The parts for your air conditioner will be replaced during the warranty period if damaged, but you will pay for the labor.

One possible _________ (advantage/drawback) of leasing an automobile is the smaller upfront cash outlay (i.e., security deposit).

advantage

A legal ________ society is one of a network of publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney.

aid

In ________, a third party tries to settle a grievance through a legally-binding process.

arbitration

Most consumer complaints are resolved: at the original location with the manufacturer through a consumer action agency with a lawsuit

at the original location

Dealing with the person who has the _________ to give you a lower price is a vital factor of negotiations.

authority

In a(n) _____-action suit, all affected parties are notified as to whether or not they want to participate or file an individual lawsuit.

class

The common sources of information regarding products during the preshopping phase include personal ________, business organizations, media, and independent testing agencies such as Consumer Reports.

contacts

An _______ warranty, usually in writing, is created by the seller or manufacturer and has two forms: the full warranty and the limited warranty. Use one word per blank.

express

True or False Question At the end of a car lease, if the market value of the car is less than the residual value, you may be able to sell the car for a profit.

false

True or false: Social factors that affect your buying habits include peer pressure, culture, and inflation.

false

True or false: The first step in the consumer complaint process is litigation.

false

True or false: You should begin the consumer complaint process at the corporate headquarters of the store where the problem began.

false

Depreciation is the largest ______ cost of a new vehicle. variable expected opportunity fixed

fixed

When selecting a lawyer, questions about legal costs should focus on the way charges will be calculated, such as ______ fee, _____ rate, or contingency basis.

flat; hourly

A ______ (full/limited) warranty states that a defective product can be fixed or replaced during a reasonable amount of time.

full

Owners of new cars are protected by the _____ laws when repeated attempts have been made to have the car fixed without success.

lemon

In _______, a third party tries to settle a grievance. However, the process is non-binding.

mediation

One of the most useful sources of information regarding products during the preshopping phase is _____ that provide buying guidance and shopping suggestions. online reviews applicable textbooks movies and documentaries

online reviews

It is important to have all the necessary information about the product and buying situation when using __________ negotiation to determine the purchase price of cars or real estate. (Enter one word per blank.)

price

Lemon laws require a(n) ___________ for the vehicle after the owner has made repeated unsuccessful attempts to get the car fixed by the dealer.

refund

A limited warranty covers only certain aspects of the product and requires the buyer to pay part of the costs for: parts and upgrades upgrades or repairs. shipping or repairs. shipping or upgrades.

shipping or repairs.

Which is the final step in the process of resolving consumer complaints? Take legal action Communicate with the company Obtain consumer agency assistance

take legal action

True or false: Well-maintained and certain high-quality vehicles depreciate at slower rates than vehicles not receiving the same level of care or not consisting of the same high quality.

true

Multiple select question. Which of the institutions are used for auto loans? A. banks B. credit unions C. consumer finance companies D. stock market E. money exchange

A, B, C

The small claims court process usually takes place without which of the following? A court date A lawyer A claim amount

A lawyer

When comparing the cost to buy versus the cost to lease an automobile, the ______ cost of the security deposit should be considered. opportunity rental bankruptcy

opportunity

True or False A unit price of a box of cereal is found by dividing the price of the product by the number of ounces in the product box or container.

true

True or False Question A wide variety of economic, social, and personal factors affect daily buying habits.

true

True or False Question As per the book, at the end of the lease, if the residual value of the vehicle is greater than its market value, then you should return the car to the leasing company.

true

True or False Question Lease payments are often less than loan payments.

true

True or false: The drawbacks of leasing an automobile include no ownership in the vehicle and costs for extra mileage, for certain repairs, and for turning the car in early.

true

Select all that apply Which of the following questions are considered when selecting a lawyer? A. How will charges be set? B. When is payment due? C. What is the mode of payment of damages to the injured? D. Is the lawyer experienced in similar types of cases?

A, B, D

Select all that apply Which of the following automobile costs are fixed ownership costs? A. Repairs B. Gas C. Depreciation D. Registration fees E. Oil F. Parking costs and tolls G. Interest on car loans H. Insurance

C, D, G, H

A network of community law offices that provide legal assistance to people who cannot afford their own attorney is called: a class-action firm. prepaid legal services. a legal aid society.

a legal aid society.

Select all that apply The factors that influence the price of a used car include: A. capitalized cost B. condition C. down payment D. number of miles E. features and options F. demand for the model

B, D, E, F