Personal Finance: Chapter 6 Quiz

postpurchase activities

Resolution of any purchase concerns is part of the ____ phase of the research-based buying process. evaluating alternatives postpurchase activities pre-shopping activities selection and purchase ordering activities

False

The unit price of a 32-ounce jar of honey that costs $8.32 is $0.13 per ounce. True False

Open dating

This shopping label is used primarily on perishable products to help the consumer judge freshness or shelf life. Coupons Open dating Rebates Unit pricing Warranty

True

A legal aid society is one of a network of publicly-supported community law offices that provides legal assistance to people who cannot afford their own attorney. True False

Mediation

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

True

A service contract is frequently called an extended warranty even though service contracts are not warranties. True False

Payment schedule

A vehicle lease has several costs. Which of the following is the amount paid monthly and the number of payments? Capitalized cost Money factor Payment schedule Residual value Trade-in value

True

Abigail checked out brands and prices of blue jeans at several stores. She was comparison shopping. True False

Depreciation.

All of the following are variable operating costs for a vehicle except: Depreciation. Gasoline and oil. Maintenance and repairs. Parking. Tires.

Implied warranty

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? "As-is" warranty Express warranty Full warranty Implied warranty Limited warranty

True

In determining the purchase price of a new car, a trade-in vehicle should NOT be mentioned until the cost of the new car has been settled. True False

Full warranty

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. "As-is" warranty Express warranty Full warranty Implied warranty Limited warranty

A class-action lawsuit

Sally has a major problem with a product and thinks that many others have had the same problem. Which of the following may be a way to resolve the problem? A class-action lawsuit A lawyer A legal aid society Prepaid legal services Small claims court

invoice price

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

True

The largest fixed expense associated with a new automobile is depreciation. True False

Capitalized cost.

The price of a leased vehicle is known as the: Invoice price. Sticker price. Set price. Capitalized cost. Residual value.

Pre-shopping activities, evaluating alternatives, selection and purchase, postpurchase activities.

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

$37,340.00.

Using the following information, what is the cost to buy a car? Down payment$4,500 Monthly loan payment$525 per month for a six-year loan Opportunity cost of down payment$4,500 × loan period (in years) × 2% interest Estimated value of vehicle at end of ownership period$5,500 $42,300.00. $37,800.00. $37,340.00. $32,300.00. $4,500.00.

$33,194.

Using the following information, what is the cost to lease a car? (Assume there are no charges for damage at the end of the lease.) Security deposit$540 Monthly lease payment$540 per month for a five-year lease Opportunity cost of security deposit$540 × loan period (in years) × 2% interest End-of-lease charges$740 $33,734. $33,934. $32,400. $33,248. $33,194.

All of these choices are correct.

Which of the following are associated with a vehicle lease? Capitalized cost Money factor Payment schedule Residual value All of these choices are correct.

At the end of the lease, you have no ownership interest in the vehicle.

Which of the following is a disadvantage of a car lease? A large down payment is required. At the end of the lease, you have no ownership interest in the vehicle. The capitalized cost is usually lower than the list price. Monthly lease payments are usually lower than monthly financing payments. You can usually obtain a more expensive vehicle than with an outright purchase.

Monthly lease payments are usually lower than monthly financing payments.

Which of the following is an advantage of a car lease? A large down payment is required. At the end of the lease, you have no ownership interest in the vehicle. The capitalized cost is usually higher than the list price. Monthly lease payments are usually lower than monthly financing payments. The total cost of a lease may be higher than a purchase.

It applies to vehicles that have been serviced four times to correct the same problem or have been out of service for more than 30 days within 12 months of purchase or the first 12,000 miles.

Which of the following is correct about the lemon law? It applies when a vehicle has been out of service for 60 days. It was enacted in 45 of the 50 states. It requires a refund for the vehicle after the owner has made repeated attempts to obtain financing. It applies to vehicles that have been serviced four times to correct the same problem or have been out of service for more than 30 days within 12 months of purchase or the first 12,000 miles. It applies to both new and used vehicle purchases.

All of these are questions that should be asked.

While evaluating alternatives, 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? All of these are questions that should be asked.

Items that can be researched easily with advertisements.

While evaluating alternatives, comparison shopping will be beneficial for buying: Inexpensive items. One-time purchases of low-cost products. Products whose prices are the same at all retailers. Products whose quality is the same at all retailers. Items that can be researched easily with advertisements.