Question 1

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?

Accepted Answer

Stephanie is most likely shopping in a cooperative store, since it is a nonprofit organization that allows members to save on groceries purchased in bulk.

Question 2

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?

Accepted Answer

Fixed costs = $2,000 + $500 + $100 = $2,600

Question 3

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.

Accepted Answer

Paul's concern about rising interest rates relates to the overall economy and the cost of borrowing money. This falls under the category of economic factors that influence purchasing decisions.

Question 4

Margaret Wilson has a piece of paper that she can mail in to the manufacturer of the product she just purchased that allows her to get part of her purchase price back. What is she most likely using?

Accepted Answer

Margaret Wilson is most likely using a rebate, which allows her to receive part of her purchase price back from the manufacturer. A coupon provides a discount on a product at the time of purchase, while a warranty and service contract are agreements that provide coverage for repair or replacement of a product in case of defects or damage. An indenture is a legal contract between two parties that outlines specific terms and conditions.

Question 5

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?

Accepted Answer

Hector is in the information gathering stage of the purchasing process. He is researching and gathering information about different car options through recommendations from friends, Consumer Reports, and internet searches.

Question 6

A Whirlpool dishwasher is an example of a:

Accepted Answer

Whirlpool is a well-known national brand of appliances.

Question 7

Brad Hayden has a piece of paper that guarantees the conditions, under which he can return, replace, or repair an item that he has purchased. What is it he most likely has?

Accepted Answer

A warranty is a guarantee from the manufacturer or seller that the product will meet certain conditions and if it fails to do so, the buyer can return or repair it. Coupons and rebates are discounts offered on the purchase of a product, rain check is a voucher for a sold-out item, and a class action suit is a legal action taken collectively by a group of people against a company or individual.

Question 8

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?

Accepted Answer

Lorenzo Clowder is determining the purchase price of his new Honda Accord by negotiating with the dealer. This falls under the step of determining the purchase price in the purchasing process.

Question 9

A credit purchase with 24 monthly payments of $78 and a down payment of $120 would have a total cost of:

Accepted Answer

(24 F1F1F1S1F1F1F10$78) + $120 = $1,992

Question 10

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?

Accepted Answer

A coupon is a piece of paper that entitles the holder to a discount or rebate on a specific product or service. In this scenario, Brian Williams has a coupon that he gives to the cashier to get a dollar off the price of a particular item. Therefore, the most likely choice is A) Coupon.

Question 11

An online buying club requires an annual fee of $60 in order to qualify for a 15 percent discount on purchases. What amount would a person have to buy in order to save enough to cover the cost of the membership?

Accepted Answer

(15%)(x) = $60; x = $60/.15 = $400

Question 12

Sally Nash has decided she needs a new car. After doing some research, she has settled on a midsized four door sedan. She likes the Honda Accord and is exploring the features she needs and wants on this car. She is also trying to decide whether she would be better off purchasing a new car, a used car, or leasing a car. She knows that if she purchases it new it would likely last her for many, many years. On the other hand a used car would be a lot cheaper. She is not sure a lease is for her because of the mileage requirements. What step in the purchasing process is Sally carrying out?

Accepted Answer

Sally is comparing the options of buying new, buying used, or leasing a car, which is part of evaluating alternatives in the purchasing process.

Question 13

Damian Walker just purchased a new vehicle. He is reading his owner's manual to know when he needs to take it in for its regular servicing at the dealer. He wants to make sure this car lasts a while. What step in the purchasing process is Damian carrying out?

Accepted Answer

Damian is engaging in post-purchase activities, which include actions taken after buying a product, such as reading the owner's manual to understand maintenance schedules. This step is crucial for ensuring the longevity and optimal performance of the vehicle.

Question 14

Isabel would spend $200 per week on groceries for her family if she did not use coupons. Her coupons save her 10 percent of that amount. She puts the amount saved into her savings account. How much will she have in her savings account at the end of the first year? Ignore interest earnings.

Accepted Answer

Isabel saves 10% of $200 which is $20 per week. So, she saves $20 x 52 = $1040 in a year. Therefore, the answer is option D, $1,040.

Question 15

Which of the following would be an advantage of leasing a vehicle?

Accepted Answer

When leasing a vehicle, one advantage is that the lease payments are typically lower than loan payments because you are only paying for the use of the vehicle during the lease term. There is no automatic ownership interest in the car and mileage restrictions usually apply. Additionally, you still must meet credit requirements to qualify for a lease. Therefore, options A, B, and C are not advantages of leasing a vehicle.

Question 16

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?

Accepted Answer

The Lemon Law provides consumers with the right to request a refund or replacement of a defective vehicle within a certain timeframe. Tiffany's repeated trips to the dealer with major problems indicate that she may have a lemon on her hands, which would entitle her to seek a refund under the Lemon Law.

Question 17

The Sears Kenmore dishwasher is an example of a:

Accepted Answer

The Sears Kenmore dishwasher is an example of a store brand, as Kenmore is a brand specifically created and marketed by Sears, making it exclusive to their stores.

Question 18

Gina Raffetto's car broke down on the way to work and her mechanic has told her that the car cannot be fixed. Gina drives 30 miles one way to work each day. There is no reliable bus or train transportation that goes anywhere near her work. Gina decides she needs a car for reliable transportation to work. What step in the purchasing process is Gina carrying out?

Accepted Answer

The answer of Gina Raffetto's car broke down on the...

Question 19

Emily is trying to decide whether to lease or buy a car. Which one of the following is not a factor necessary in making the comparison?

Accepted Answer

Gasoline costs are not a factor that differs between leasing and buying a car. The factors that do differ and need to be considered include the down payment, monthly lease payments, estimated value of the vehicle at the end of the lease period, and mileage overage charges.

Question 20

The price that is paid for a vehicle in a lease is called the:

Accepted Answer

The price paid for a vehicle in a lease is called the capitalized cost. This represents the negotiated purchase price of the vehicle, including any fees or charges, that is used to calculate the monthly lease payments. Residual value represents the estimated value of the vehicle at the end of the lease term, while deductible and premium are terms typically associated with insurance. Unit price refers to the cost per unit of a product, not specifically related to vehicle leasing.

Quiz 8: Consumer Purchasing Strategies and Legal Protection