Chapter 8: Consumer Purchasing Strategies and Legal Protection

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

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. Consumers can choose a specific type of retailer in order to obtain better prices and Consumers can time their purchases in order to take advantage of sales. 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 and Consumers can utilize a purchasing agent to determine the best prices.

Consumers can choose a specific type of retailer in order to obtain better prices and Consumers can time their purchases in order to take advantage of sales.

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. Consumers can bring their claims to a small claims court and Consumers can consult with a lawyer Consumers can file or become a participant in a class-action lawsuit, Consumers can bring their claims to a small claims court, and Consumers can consult with a lawyer

Consumers can file or become a participant in a class-action lawsuit, Consumers can bring their claims to a small claims court, and Consumers can consult with a lawyer Explanation The legal actions that consumers can take in the consumer complaint process include:• Consumers can bring their claims to a small claims court.• Consumers can file or become a participant in a class-action lawsuit.• Consumers can consult with a lawyer.

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

Difficult

Assume Eric Sanchez saves $60 a month by using coupons and doing comparison shopping. (a) What is the annual savings amount? (b) What would be the future value of this annual amount over 10 years, assuming an interest rate of 3 percent? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

Explanation (a) Annual savings amount=Monthly savings × 12 =$60 × 12 =$720 (b) FV=Annual savings × Future value annuity factor =$720 × 11.464 =$8,254.08

You have gathered the following vehicle costs: Vehicle Costs: Annual depreciation: $2,500 Annual mileage: $13,200 Current year's loan interest: $650 Miles per gallon: $24 Insurance: $680 Average gasoline price: $3.68 per gallon License and registration fees: $65 Oil changes/repairs: $370 Parking/tolls: $420 (a) Calculate the annual variable and fixed costs of the vehicle. (Round answer to nearest whole number.) (b) Compute the operating cost per mile. (Enter your answer in cents rounded to 1 decimal place.)

Explanation (a) Fixed Ownership Costs: $2,500 Depreciation $650 Interest on loan $680 Insurance $65 License/registration Total fixed costs=$3,895 Variable Operating Costs: $2,024 Gasoline $370 Oil/repairs $420 Parking/tolls Total variablecosts=$2,814 Gasoline cost=(Annual mileage / Miles per gallon) × Average gasoline price per gallon =(13,200 / 24) × $3.68 =$2,024 (b) Operating cost per mile=(Total fixed costs + Total variable costs) / Annual mileage =($3,895 + 2,814) / 13,200 =$0.508, or 50.8 cents per mile

Angela Simpson is considering the purchase of a home entertainment center. The product attributes she plans to consider and the weights assigned to each attribute are listed in the table below. Product Attributes: Portability 0.1 Sound projection 0.6 Warranty 0.3 Angela rated the brands as follows. Brand A:6 (Portability) 8 (Sound Projection) 7 (Warranty) Brand B: 9 (Portability) 6 (Sound Projection) 8 (Warranty) Brand C:5 (Portability)9 (Sound Projection) 6 (Warranty) Using the consumer buying matrix, conduct a quantitative product evaluation rating for each brand. What other factors is Angela likely to consider when making her purchase? (Do not round intermediate calculations. Round your answers to 1 decimal place.)

Explanation Brand A: (0.1 × 6) + (0.6 × 8) + (0.3 × 7) = 7.5 Brand B: (0.1 × 9) + (0.6 × 6) + (0.3 × 8) = 6.9 Brand C: (0.1 × 5) + (0.6 × 9) + (0.3 × 6) = 7.7 Angela should also consider many other factors such as store location, availability of service, brand reputation, experience of others, and shipping costs.

Pierre Martina is comparing the cost of credit to the cash price of an item. If Pierre makes a down payment of $70 and pays $34 a month for 24 months, how much more will that amount be than the cash price of $695? (Input the amount as a positive value.)

Explanation Difference=Credit purchase cost - Cash price =[($70 + (24 × $34)] − $695 =$191

Krista Lee can purchase a service contract for all of her major appliances for $180 a year. If the appliances are expected to last for 10 years and she earns 5 percent on her savings, what would be the future value of the amount Krista will pay for the service contract? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)

Explanation FV=Annual payment × Future value annuity factor =$180 × 12.578 =$2,264.04

What would be the net present value of a microwave oven that costs $159 and will save you $68 a year in time and food away from home? Assume an average return on your savings of 4 percent for five years. Use Exhibit 1-D. (Round time value factor to 3 decimal places and answer to 2 decimal places.)

Explanation NPV=PV of cost savings - Initial cost =($68 × 4.452) - $159 =$143.74

Purchase Costs: Down Payment: $1,500 Loan Payment: $450 for 36 months Estimated value at end of loan $4,000 Opportunity cost interest rate: 4 percent Leasing Costs: Security deposit: $500 Lease payment: $450 for 36 months End of lease charges: $600 Based on the costs listed in the table above, calculate the costs of buying and leasing a motor vehicle.

Explanation Total purchase cost=Down payment + Loan payments + Opportunity cost - Estimated value at end of loan =$1,500 + ($450 × 36) + ($1,500 × 0.04 × 3) - $4,000 =$13,880 Total lease cost=Lease payments + Opportunity cost + End-of-lease charges =($450 × 36) + ($500 × 0.04 × 3) + $600 =$16,860

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

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

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

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. Explanation: Step Two - Compare Stores:• Consider both brick-and-mortar stores and online merchants.• Evaluate price, service, product quality, warranties, shipping cost, shipping time, and the return policy.• Determine the reputation of the product or service and where and how the product can be located.

According to 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. ~Individuals should delete all emails from the company for future reference and Individuals should keep receipts, warranty information, and other documents for the product or service you purchased. ~Individuals should keep receipts, warranty information, and other documents for the product or service you purchased and Individuals should post on the company's social media sites.

Individuals should keep receipts, warranty information, and other documents for the product or service you purchased. Explanation: Step 4 - Plan for Future Purchases:• Keep receipts, warranty information, and other documents.• Know the company and manufacturer's return policy and complaint process.• Watch for e-mails from the company about special offers to lower the price of the product or service in the future.• Evaluate the time and effort involved in purchasing this product or service.

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.

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 not provide a suggested remedy for the problem.

The consumer should not provide a suggested remedy for the problem. Explanation Step 1 - Initial Communication:• Return to the place of purchase or contact the online retailer.• Provide a detailed explanation and the action (solution) you desire.• Be pleasant yet persistent in your efforts to obtain a resolution.

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 There are not any additional costs incurred for extra mileage, There is a small security deposit, and There are lower monthly payments 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.