Chapter 8 Problems Personal Finance

The first phase in the buying process involves information gathering. true
Several federal government agencies publish materials to assist consumers with buying decisions and financial planning. true
Open dating information provides consumers with information about product freshness. true
Service contracts are usually included in the cost of appliances and other high-priced items. false
Representation by a lawyer is usually required in small claims court. false
A social factor that would influence a consumer’s buying decision would be the hobbies and interests they have. true
A limited warranty covers all aspects of the product and does not require the buyer to incur any of the costs for shipping and repairs. false
Near-field communications (NFC) allows consumers to make purchases by waving their smartphones in front of a sensor when paying. true
An example of an economic buying influence would be: inflation
The first phase of the consumer buying process is: identifying the problem.
Which organization specializes in the testing of products for electrical and fire safety? Underwriters Laboratories
Cooperatives are most commonly organized to sell: food
A cooperative is designed to: sell products or services to members at reduced prices.
The items produced for a single retail chain are commonly sold under a ____________ brand. store
Private label products are those that: are sold by one chain of stores.
A 32-ounce package selling for $1.60 would have a unit price of: Unit price = $1.60/32 = $0.05 an ounce5′ an ounce.
What type of warranty indicates that the seller has the right to sell a product? Warranty of title
Which one of these statements best describes the major criticism of service contracts? The contracts are expensive and contain a lot of exclusions.
The process of resolving consumer complaints with the use of a third party whose recommendations are non-binding is called: mediation.
Most consumer complaints are resolved by: returning to the place of purchase.
Arbitration differs from mediation in that arbitration: is legally binding.
Small claims courts: are located in every state.
When buying an automobile, the best warranties are usually offered by a(n): new car dealer.
An implied warranty that comes with a used car is that: the vehicle is in operating condition.
For a class action suit to be valid, it must: involve several people with the same problem.
Most cars bought from private parties have: no express warranty.
The sticker price of a car refers to: the suggested retail price of a new car.
The purpose of an automobile service contract is to: repair major problems after the warranty expires.
____________ is considered a variable operating expense of an automobile. Maintenance
Mike Jacobs is planning to lease an automobile. In an effort to minimize the price of the vehicle being leased, Mike should compare the ____________ at different leasing companies. capitalized cost
Paul Spoon has noticed that interest rates have risen in recent months. He is worried that this may make it more difficult for him to finance the purchase of a car. This would be an example of a(n) ________ factor that influences his purchasing decision. economic
Brian Williams has a piece of paper that he gives to the cashier when he purchases a particular item that allows him to get a dollar off the cost of that item. What is he most likely using? Coupon
A Whirlpool dishwasher is an example of a: national brand.
Stephanie Johns is a member in a store that is a nonprofit organization that buys grocery items in bulk. Members can save a considerable amount on the groceries they purchase in the store. Stephanie is most likely shopping in which type of store? Cooperative
Hector Ramirez has decided he needs a new car so that he has reliable transportation to work. He is getting recommendations from his friends as to what might be a good car to purchase. He is also looking at the Consumer Reports magazine to determine what they recommend as a safe, low maintenance car and he has searched some web sites on the internet as well. What step in the purchasing process is Hector carrying out? Information gathering
Lorenzo Clowder has settled on purchasing a new Honda Accord and has found that the suggested retail price is $22,200 and that the dealer’s invoice price is $19,980. It is time for him to go to a dealer and negotiate the price he will pay for his new car. What step in the purchasing process is Lorenzo carrying out? Determining the purchase price
Which of the following would be an advantage of leasing a vehicle? Lease payments are likely to be lower than loan payments
Tiffany Parrish has purchased a new car. Since then she has had to make six trips to the dealer in four weeks to fix several major problems without much luck. She knows that she is entitled to a refund. What type of law gives her the right to ask for a refund? Lemon Law
A credit purchase with 24 monthly payments of $78 and a down payment of $120 would have a total cost of: Total cost = $120 + $78(24) = $1,992
A motor vehicle has annual depreciation of $2,000; oil changes cost $120, automobile insurance $500 annually, and license plates costs $100. What is the annual amount of the total fixed operating cost for this vehicle? Annual fixed costs = $2,000 + 500 + 100 = $2,600
Regular vehicle maintenance is essential to extending the life of your car. Engine oil should be changed approximately every ____ months or _______ miles. 3; 3,000
Which of the following is least likely to affect the timing of purchases to help you obtain bargains? Time zones
The expected value of a vehicle at the end of a lease is called the: residual value.
Federal laws limit the amount of fraudulent charges that a consumer is liable for in the case of a lost or stolen card to: $50.
Which type of purchasing strategy involves comparing unit prices? Price comparison
What type of warranty covers only certain aspects of the product, such as parts, or requires the buyer to incur part of the costs for shipping or repairs? Limited warranty

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