Money Matters
A 24-ounce carton of Product Z sells for $5.28. What is the unit price?
$0.22
If you are currently earning $28,000 annual salary and the rate of inflation is 4 percent, what dollar amount do you need as a cost-of-living adjustment (COLA) to maintain your current purchasing power?
$1,120
You work for an hourly wage of $10.00 and your employer gives you a raise of $1.50 per hour, which represents both a COLA and a merit increase. If the rate of inflation is 2 percent, what is the dollar amount of the merit increase?
$1.30
A retailer bought a carton of 36 deluxe brownie mixes for $43.20. The markup will be 40 percent. At what price will a box of deluxe brownie mix sell to the public?
$1.68
A retailer purchases an item at $70 per unit and sells it for $98 per unit. What is the markup percentage?
40%
The following consumer protection agencies are private organizations except the a. Consumer Product Safety Commission (CPSC) b. Major Appliance Consumer Action Panel (MACAP) c. National Consumers League (NCL) d. Better Business Bureau (BBB)
A
When a producer sets prices for products based on a desired profit level, the producer is using a. cost-plus pricing b. cost-recovery pricing c. market-based pricing d. value-based pricing
A
Which law requires drug manufacturers to test drugs for safety and effectiveness before they are sold to consumers? a. Kefauver-Harris Drug Amendment of 1962 b. Patients' Bill of Rights c. Health Insurance Portability and Accountability Act (HIPAA) of 1996 d. Hazardous Substances Act of 1960
A
Which of the following is a measure of inflation? a. CPI b. COLA c. BLS d. GDP
A
Businesses use to inform consumers about products and encourage them to buy.
Advertising
The agency that is the federal clearinghouse for complaints of identity theft is the a. Consumer Product Safety Commission (CPSC) b. Federal Trade Commission (FTC) c. Securities and Exchange Commission (SEC) d. Consumers Union (CU)
B
When gasoline prices fall and jump back up again, this is an example of a. hyperinflation b. reflation c. disinflation d. deflation
B
A(n) _________ ad is a form of advertising that spans the top, bottom, or sides of a web page.
Banner
_______ ________ pricing is a method often used by companies that invest large sums of money for research and development of new products.
Cost recovery
A(n)________ ________ program is designed to encourage a customer's repeat business by providing special discounts and other incentives.
Customer loyalty
The Consumer Technology Bill of Rights gives consumers the right to a. translate content into other formats b. time-shift c. space-shift d. all of these
D
When consumers act in their own best self-interests when making purchases, they are engaging in a. emotional buying b. loyalty buying c. impulse buying d. rational buying
D
Which of the following bags of chips of comparable quality has the lowest per-unit cost and, thus, is the best buy? a. Brand A, 8 oz. bag for $3.60 b. Brand C, 16 oz. bag for $6.50 c. Brand D, 1 oz. bag for $0.59 d. Brand B, 10 oz. bag for $3.90
D
Which of the following will provide more purchasing power to a consumer? a. a COLA b. none of these c. disinflation d. a merit raise
D
___________ ___________ inflation is often described as "too many dollars chasing too few goods."
Demand-pull
Bait and switch is considered an unethical sales technique, but it is not illegal. a. True b. False
False
Billboards and signs are examples of targeted advertising.
False
Economists believe there is no direct relationship between inflation and employment. a. True b. False
False
In a Ponzi scheme, a con artist convinces a person to give up his or her money in return for a share in a larger sum of money. a. True b. False
False
Reflation is the opposite of inflation. a. True b. False
False
The Consumer Bill of Rights of 1962 guarantees that you will receive compensation for hardships caused from being bumped from an oversold flight. a. True b. False
False
When prices rise faster than income, buyers gain purchasing power. a. True b. False
False
When producers raise prices because their costs to create products are rising, real-cost inflation occurs. a. True b. False
False
The ______ ______ _________ Administration is a federal agency that enforces laws and prevents or stops the selling of mislabeled foods, drugs, cosmetics, and medical devices. Hide
Food and Drug
______ _________ is advertising a basic service at an unusually low price to lure in customers and then telling them that they need additional repairs or services.
Low-balling
When input costs, such as wages or the cost of new equipment, are more than offset by higher output, such as larger quantities of a product, _________ rises.
Productivity
The ______ _______ _____ _________ is a concept that says a dollar you receive in the future will be worth less than a dollar you receive today.
Time value of money
You are ________ when you record video or audio for later viewing or listening.
Time-shifting
Consumers are said to be optimizing when they seek to get the highest value for the money spent. a. True b. False
True
Having a company representative give out free samples in a store is an example of direct advertising. a. True b. False
True
Higher productivity lowers the cost of each unit produced. a. True b. False
True
Mild inflation of 2 or 3 percent is said to be good for the economy. a. True b. False
True
The HIPAA of 1996 states that health providers cannot use Social Security numbers for patient identification. a. True b. False
True
The United States has not experienced a period of hyperinflation in the prices of general goods and services. a. True b. False
True
The most common type of inflation is demand-pull inflation. a. True b. False
True
