Chapter 6: Consumer Purchasing Strategies and Wise Buying of Motor Vehicles
The unit price of a 64 ounce carton of orange juice that costs $3.20 is
$0.05 per ounce
The unit price of a 2 pound (32 ounces) box of brown sugar that costs $3.20 is
$0.10 per ounce
The average used car costs about ______ less than the average new car.
$10,000
Choosing the payment method is part of the ____ phase of the decision-making process.
Selection and purchase
Negotiation activities are part of the ____ phase of the decision-making process.
Selection and purchase
If you have a problem whose remedy will be $1500 - $3000, the appropriate tool to use would be (a)
Small claims court
A standard measurement used to compare packages of different sizes is
Unit pricing
Which of the following sources would be the LEAST helpful when purchasing a vehicle?
Your cousin who has never purchased a car
Which of the following costs will directly increase with the number of miles driven?
Gasoline
When purchasing a used vehicle, it is a good idea to
Have a trained and trusted mechanic of your choice check out the vehicle
Paul bought some bad gasoline that damaged the gas tank of his vehicle.
He should provide the gas station with documentation of his purchase and all repair costs.
Using the following information, what is the cost to lease a car? Security deposit $250 Monthly lease $300 per month for a 4-year lease Opportunity cost of down payment $250 loan period in years 2% interest End-of-lease charges $800
$13,870
Using the following information, what is the cost to buy a car? Down payment $2000 Monthly loan payment $300 per month for a 5-year loan Opportunity cost of down payment $2000 loan period in years 2% interest Estimated value of vehicle at end of ownership period $2000
$18,200
Which of the following is a disadvantage of a car lease?
At the end of the lease, you have no ownership interest int he vehicle
The price of a leased vehicle is known as the
Capitalized cost
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
Jacob drives by a Big Box home improvement center on his way home from work. He usually stops and buys something because it makes him feel good. Jacob is
Compulsive shopping
Tamra went to a restaurant and had an unpleasant experience that sent her to the hospital. The problems at the restaurant should be handled by
County health department
This type of promotion provides an immediate savings for consumers.
Coupons
Think about consumer complaints. Which of the following is correct?
If you don't get satisfaction from working with headquarters, you may get assistance form a mediator in order to avoid legal action.
Steven needs to write a will. His best resource is (a)
Lawyer
Adolph has a low income and needs legal assistance. He should make use of (a)
Legal aid society
Which of the following is not a legal option for upper-income consumers?
Legal aid society
Karen bought a mixer. She received a warranty that covers only certain aspects of the product. If the product fails, she may required to pay part of the costs for shipping or repairs. Which of the following warranties does Frank have?
Limited warranty
A process used to settle grievances using a nonbinding process is called a(n)
Mediation
A vehicle lease has several costs. Which of the following is the interest rate used to calculate the monthly cost?
Money factor
If you want to pay a set fee to receive unlimited or reduced-fee assistance, you should use (a)
Prepaid legal services
The partial refund of the price of a product is called
Rebates
A clear statement of a problem is: "I need to have a car."
false
A convenience option that consumers may look for in a vehicle specials trim.
false
A lease for a car or SUV is typically for three to five years.
true
A service contract is frequently called an extended warranty even though service contracts are not warranties.
true
One of the best places to find a qualified lawyer who will meet your specific needs is referrals from friends.
true
People should be prepared for problems with purchases.
true
A fixed operating cost for a vehicle is
Depreciation
All of the following are variable operating costs for a vehicle except
Depreciation
Mike bought a new car. His new car warranty probably included all except
Extended coverage for air conditionins
Most products come with some guarantee of quality. This type of warranty covers the product's intended use or other basic understandings that are not in writing.
Implied warranty
While Paul was shopping for a new chainsaw, he found a great deal on new drill and bought it. This an example of
Impulse shopping
The dealer's cost is also known as the
Invoice price
All of the following are appropriate questions you could ask before making a major purchase except
Is it possible to delay the purchase or to do without the item?, Should I pay for the item with cash or buy it on credit?, Which brands should I consider?, How do the price, quality, and service compare at different stores?
Comparison shopping will be beneficial for buying
Items that can be researched easily with advertisements
Most products come with some guarantee of quality. This type of warranty covers only certain aspects of the product, such as parts.
Limited warranty
Which of the following NOT a strategy for wise buying?
Buying items on impulse
The largest fixed expense associated with a new automobile is
Depreciation
Most products come with some guarantee of quality. This type of warranty states that a defective product can be fixed or replaced during a reasonable amount of time.
Full warranty
Steve bought a laptop that was defective. This laptop will be fixed or replaced by the manufacturer as long as he returns it in a reasonable amount of time. What type of warranty does he have on his laptop?
Full warranty
Helga plans to purchase a pick-up truck. She should begin her price negotiation at the
Invoice price
Tracy went to a local restaurant and became ill from the meal she ate. She can contact her city or county health department to handle problems with the restaurant.
true
An example of a "preshopping activity" is negotiating the price of a product.
false
If you are somewhat interested in a specific vehicle, you should provide a small deposit so the car seller will hold the vehicle for you.
false
A vehicle lease has several costs. Which of the following is the price of the vehicle?
Capitalized cost
Izzy is thinking about leasing a sports car. She will make monthly payments based on a money factor and the
Capitalized cost
Which of the following is a cost associated with a vehicle lease?
Capitalized cost, money factor, payment amount, and residual value
Craig wants to get his old car repaired, but he doesn't want to spend very much money. He probably will NOT want to go to a
Car dealer
Abigail checked out brands and prices of blue jeans at several stores. She was comparison shopping.
true
When Jane researched the brands and prices of her refrigerator, she was
Comparison shopping
One of the first steps in a car purchase negotiation should be a discussion of the trade-in vehicle.
false
Prices at the local Quick Market (convenience store) will probably be lower than the regional Big Box Retailer (grocery store).
false
Service contracts on vehicles usually are wise financial decisions.
false
Small claims court is used to take legal action by a few individuals on behalf of all who have suffered the same alleged injustice.
false
Studies of consumer problems consistently rank auto repairs as one of the best consumer services with few consumer complaints.
false
The best place to find a qualified lawyer who will meet your specific needs is a phone book.
false
The settlement of a difference by a mediator is legally binding.
false
Buying a vehicle can be a challenging process. When researching a vehicle, a consumer may want to consider all of the following except
Mechanical devices to improve performance, convenience options such as air conditioning, and aesthetic features like metallic paint
Which of the following is an advantage of a car lease?
Monthly lease payments are usually lower than monthly financing payments
These products are highly advertised and available at many stores
National-brands
A potential problem with having a long car loan is
Negative equity
George has never bought a car before. Which of the following techniques should he use to get the best deal?
Research the actual dealer cost and begin negotiations form that point
A vehicle lease has several costs. Which of the following is the expected value at the end of the lease?
Residual value
The expected value of a vehicle at the end of a lease is called the
Residual value
A no-haggling dealer will use a(n)
Set-price
The amount printed on a label that is posted on a vehicle is called
Sticker price
This is a written guarantee from the manufacturer that specifies the conditions under which the product can be returned, replaced, or repaired.
Warranty
A good time to use a lawyer is when you appear in small claims court.
false
A vehicle that looks rusty on the outside will have major operational problems.
false
Abigail checked out brands and prices of blue jeans at several stores. She was impulse shopping.
false
An aesthetic feature of a vehicle is air conditioning.
false
This shopping device is used primarily on perishable products.
Open dating
A vehicle lease ha several costs. Which of the following is the periodic cost?
Payment amount
Properly maintaining and operating the product is part of the ___ phase of the decision-making process.
Post-purchase activities
Resolving purchase concerns is part of the ___ phase of the decision-making process.
Post-purchase activities
Information gathering is part of the _____ phase of the decision-making process
Pre-shopping activities
Problem identification is part of the ______ phase of the decision-making process.
Pre-shopping activities
These products are sold by one chain of stores and are low-cost alternatives to famous-name products.
Private-label brands and Store-brands
A service contract
Covers the repair costs of a product.
Comparison of product features is part of the ____ phase of the decision-making process.
Evaluating alternatives
Price analysis is part of the ____ phase of the decision-making process.
Evaluating alternatives
Most products come with some guarantee of quality. Which of the following is usually in written form, created by the seller or manufacturer and has two forms?
Express warranty
Which of the following is the best way to state a problem?
I need transportation.
Frank bought some mini-blinds. Although he did not receive a written warranty, the blinds should be expected to open and close properly. What kind of warranty does Frank have?
Implied warranty
Which of the following is correct about the lemon law?
It applies to vehicles that have been serviced four times to correct the same problem in the first 12,000 miles.
Most customer complaints result from the following except
Long product lives
A variable operating cost for a vehicle is
Maintenance and repairs
All of the following are fixed operating costs for a vehicle except
Maintenance and repairs
If you have a problem with a product and you really want to get the attention of someone in customer service, you should raise your voice during your conversation.
false
If you have a problem with a product, the first place you should express you dissatisfaction to is the corporate headquarters.
false
Lemon laws have been enacted in 48 of the 50 states for new vehicle purchases.
false
One of the best ways to compare packaged food products is to use rebate pricing.
false
A trade-in vehicle should NOT be mentioned until the cost of the new car has been settled.
true
The largest fixed expense associated with a new automobile is depreciation.
true
Comparison shopping will be beneficial for buying all of the following except
A hot dog at the baseball park
A vehicle that looks rusty on the outside may hide a well-maintained engine.
true
An advantage of a lease over a purchase is that the buyer can usually obtain a more expensive vehicle for the same monthly payment.
true
Cam has an overwhelming desire to buy things whenever she goes shopping. One could say that he is a compulsive shopper.
true
Joe bought some cheese at his local grocery store. After he brought it home, he noticed, it was moldy even thought the expiration date was still three weeks away. He should call the toll-free hotline number printed on the package to tell the company of the problem he encountered.
true
The settlement of a difference by an arbitrator is legally binding.
true
Thomas bought a toaster that would not toast bread and returned it. The manufacturer accepted the return because it was defective and had a full warranty.
true
Thomas bought a vehicle from a used-car dealer. He returned it to the dealer because the transmission fell out 150 miles after he purchased it. The dealer refused to accept the return because the vehicle was sold 'as is.' This is an example of a limited warranty.
false
The best time to ask a lawyer about his fees is after he wins a case for you.
false
The only way that you can have long-term financial security is to not save all your current income.
false
The phases of buying are: problem identification, pre-shopping activities, evaluating alternatives, selection and purchase, post-purchase activities.
false
The text identifies several phases in the buying process. The correct order of the phases is
Pre-shopping activities, evaluating alternatives, selection and purchase, post-purchase activities
