FINC298 Chap 006

Chapter 06 - Consumer Purchasing Strategies and Wise Buying of Motor Vehicles
Chapter 06
Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

True / False uestions

1. (p. 188) he only !ay that you can ha"e long-term financial security is to not sa"e all of your
current income.
F!"S#
he only !ay is to not SP#$% all income.

Bloom's: Comprehension
Difficulty: Easy
Learning O!ecti"e: 1
#opic: Buying acti"ities

&. (p. 188) '(igail chec)ed out (rands and prices of (lue *eans at se"eral stores. She !as impulse
shopping.
F!"S#
She !as comparison shopping.

Difficulty: Easy

+. (p. 188) '(igail chec)ed out (rands and prices of (lue *eans at se"eral stores. She !as
comparison shopping.
T$%#

Difficulty: Easy

6-1
,. (p. 188) Cam has an o"er!helming desire to (uy things !hene"er he goes shopping. -ne
could say that he is a compulsi"e shopper.
T$%#

Difficulty: Easy

.. (p. 188$18%) -ne of the (est !ays to compare pac)aged food products is to use re(ate pricing.
F!"S#
Comparisons are made !ith unit pricing.

Difficulty: &e'ium

6. (p. 188$18%) Prices at the local /uic) Mar)et 0con"enience store1 !ill pro(a(ly (e lo!er than
the regional Big Bo2 3etailer 0grocery store1.
F!"S#
Con"enience stores usually ha"e higher prices.

Difficulty: &e'ium

4. (p. 1%() homas (ought a toaster that !ould not toast (read and returned it. he manufacturer
accepted the return (ecause it !as defecti"e and had a full !arranty.
T$%#

Difficulty: &e'ium

6-&
5. (p. 1%() homas (ought a "ehicle from a used-car dealer. 6e returned it to the dealer (ecause
the transmission fell out 1.0 miles after he purchased it. he dealer refused to accept the
return (ecause the "ehicle !as sold 7as is.8 his is an e2ample of a limited !arranty.
F!"S#
Since the "ehicle !as sold 9as is:9 no !arranty !as offered.

Bloom's: )nalysis
Difficulty: *ar'

;. (p. 1%() ' ser"ice contract is fre<uently called an e2tended !arranty e"en though ser"ice
contracts are not !arranties.
T$%#

Bloom's: )nalysis
Difficulty: &e'ium

10. (p. 1%+) Ser"ice contracts on "ehicles usually are !ise financial decisions.
F!"S#
Because of costs and e2clusions: ser"ice contracts may $- (e a !ise financial decision.

Bloom's: )nalysis
Difficulty: &e'ium

11. (p. 1%+) 'n e2ample of a 9preshopping acti"ity9 is negotiating the price of a product.
F!"S#
$egotiations are part of the Selection and Purchase phase of the (uying process.

Bloom's: )nalysis
Difficulty: &e'ium

6-+
1&. (p. 1%+) he phases of (uying are= pro(lem identification: pre-shopping acti"ities: e"aluating
alternati"es: selection and purchase: post-purchase acti"ities.
F!"S#
Pro(lem identification is part of the 9pre-shopping9 acti"ities> therefore: there are four phases.

Bloom's: )nalysis
Difficulty: *ar'

1+. (p. 1%,) ' clear statement of a pro(lem is= 9? need to ha"e a car.9
F!"S#
' (etter statement !ould (e 9? need transportation.9

Difficulty: &e'ium
Learning O!ecti"e: +
#opic: Buying motor "ehicles

1,. (p. 1%-) ' con"enience option that consumers may loo) for in a "ehicle is special trim.
F!"S#
Special trim is an aesthetic feature on a "ehicle.

Difficulty: &e'ium

6-,
1.. (p. 1%-) 'n aesthetic feature of a "ehicle is air conditioning.
F!"S#
'ir conditioning is a con"enience option.

Difficulty: &e'ium

16. (p. 1%-) ' "ehicle that loo)s rusty on the outside !ill ha"e ma*or operational pro(lems.
F!"S#
@oo)s can (e decei"ing.

Difficulty: &e'ium

14. (p. 1%-) ' "ehicle that loo)s rusty on the outside may hide a !ell-maintained engine.
T$%#

Difficulty: &e'ium

15. (p. 1%-) ' lease for a car or SAV is typically for three to fi"e years.
T$%#

Difficulty: &e'ium

6-.
1;. (p. 1%-) 'n ad"antage of a lease o"er a purchase is that the (uyer can usually o(tain a more
e2pensi"e "ehicle for the same monthly payment.
T$%#

Difficulty: &e'ium

&0. (p. 1%8) -ne of the first steps in a car purchase negotiation should (e a discussion of the
trade-in "ehicle.
F!"S#
' trade-in "ehicle should $- (e mentioned until the cost of the ne! car has (een settled.

Difficulty: &e'ium

&1. (p. 1%8) ' trade-in "ehicle should $- (e mentioned until the cost of the ne! car has (een
settled.
T$%#

Difficulty: &e'ium

&&. (p. 1%8) ?f you are some!hat interested in a specific "ehicle: you should pro"ide a small
deposit so the car seller !ill hold the "ehicle for you.
F!"S#
?f you change your mind a(out the "ehicle: you can lose your deposit> therefore: ne"er lea"e a
deposit until you are ready to (uy a "ehicle.

Difficulty: &e'ium

6-6
&+. (p. +(() @emon la!s ha"e (een enacted in ,5 of the .0 states for ne! "ehicle purchases.
F!"S#
'll .0 states and the %istrict of Colum(ia ha"e enacted lemon la!s.

Bloom's: .no/le'ge
Difficulty: &e'ium

&,. (p. +(() he largest fi2ed e2pense associated !ith a ne! automo(ile is depreciation.
T$%#

Difficulty: Easy

&.. (p. +(1) Studies of consumer pro(lems consistently ran) auto repairs as one of the (est
consumer ser"ices !ith fe! consumer complaints.
F!"S#
Studies ha"e ran)ed auto repairs as one of the top consumer rip-offs.

Difficulty: &e'ium

&6. (p. +(+) People should (e prepared for pro(lems !ith purchases.
T$%#

Bloom's: .no/le'ge
Difficulty: Easy
Learning O!ecti"e: ,
#opic: Consumer complaints

6-4
&4. (p. +(+) ?f you ha"e a pro(lem !ith a product and you really !ant to get the attention of
someone in customer ser"ice: you should raise your "oice during your con"ersation.
F!"S#
Bou should use a calm: rational: persistent approach.

Difficulty: Easy

&5. (p. +(+) ?f you ha"e a pro(lem !ith a product: the first place you should e2press your
dissatisfaction to is the corporate head<uarters.
F!"S#
Bou should contact the corporate le"el if a pro(lem is not resol"ed at the local store.

Difficulty: &e'ium

&;. (p. +(+) Coe (ought some cheese at his local grocery store. 'fter he (rought it home: he
noticed it !as moldy e"en though the e2piration date !as still three !ee)s a!ay. 6e should
call the toll-free hotline num(er printed on the pac)age to tell the company of the pro(lem he
encountered.
T$%#

Difficulty: &e'ium

6-5
+0. (p. +(,) he settlement of a difference (y a mediator is legally (inding.
F!"S#
he settlement (y an ar(itrator is (inding. Mediation is a non(inding process.

Difficulty: &e'ium

+1. (p. +(,) he settlement of a difference (y an ar(itrator is legally (inding.
T$%#

Difficulty: &e'ium

+&. (p. +(,) racy !ent to a local restaurant and (ecame ill from the meal she ate. She can
contact her city or county health department to handle pro(lems !ith the restaurant.
T$%#

Difficulty: &e'ium

++. (p. +(0) Small claims court is used to ta)e legal action (y a fe! indi"iduals on (ehalf of all
!ho ha"e suffered the same alleged in*ustice.
F!"S#
Small claims court is for lo!-"alue claims. he legal action ta)en on (ehalf of others is a
class action suit.

Difficulty: Easy
#opic: Legal options

6-;
+,. (p. +(-) he (est place to find a <ualified la!yer !ho !ill meet your specific needs is a
phone (oo).
F!"S#
Common sources of la!yers are referrals from friends: ad"ertisements: and the local di"ision
of the 'merican Bar 'ssociation.

Difficulty: Easy

+.. (p. +(-) -ne of the (est places to find a <ualified la!yer !ho !ill meet your specific needs
is referrals from friends.
T$%#

Difficulty: Easy

+6. (p. +(-) ' good time to use a la!yer is !hen you appear in small claims court.
F!"S#
@a!yers are often used in more complicated matters.

Difficulty: &e'ium

+4. (p. +(-) he (est time to as) a la!yer a(out his fees is after he !ins a case for you.
F!"S#
Bou should as) a(out the fee structure and payments !hen you select the la!yer.

Difficulty: Easy

6-10

Multiple Choice uestions

+5. (p. 188$1%() When Cane researched the (rands and prices of her refrigerator: she !as
!& Comparison shopping
B. Compulsi"e shopping
C. ?mpulse shopping
%. rade-off shopping
#. Warranty shopping

Difficulty: &e'ium

+;. (p. 188$1%() While Paul !as shopping for a ne! chainsa!: he found a great deal on ne! drill
and (ought it. his is an e2ample of
'. Comparison shopping
B. Compulsi"e shopping
C& ?mpulse shopping

Difficulty: &e'ium

,0. (p. 188$1%() Caco( dri"es (y a Big Bo2 home impro"ement center on his !ay home from
!or). 6e usually stops and (uys something (ecause it ma)es him feel good. Caco( is
'. Comparison shopping
B& Compulsi"e shopping
C. ?mpulse shopping

Difficulty: &e'ium

6-11
,1. (p. 188$1%() Which of the follo!ing is $- a strategy for !ise (uyingD
'. Buying !inter clothes on sale in mid- or late !inter
B. 3esearching the prices and choices for purchases
C& Buying items on impulse
%. Carefully considering (uying alternati"es
#. Asing unit pricing to compare products

Difficulty: &e'ium

,&. (p. 18%$1%() hese products are highly ad"ertised and a"aila(le at many stores
'. Pri"ate-la(el (rands
B. Store-(rands
C& $ational-(rands
%. 3egional (rands
#. Eeneric items

Difficulty: &e'ium

,+. (p. 18%$1%() hese products are sold (y one chain of stores and are lo!-cost alternati"es to
famous-name products.
'. Pri"ate-la(el (rands
B. Store-(rands
C. $ational-(rands
'& !o of the a(o"e are correct
#. 'll of the a(o"e are correct

Difficulty: &e'ium

6-1&
,,. (p. 1%() ' standard measurement used to compare pac)ages of different siFes is
'. Coupons
B. -pen dating
C. 3e(ates
'& Anit pricing
#. Warranty

Difficulty: &e'ium

,.. (p. 1%() his type of promotion pro"ides an immediate sa"ings for consumers.
!& Coupons
B. -pen dating
C. 3e(ates
%. Anit pricing
#. Warranty

Difficulty: &e'ium

,6. (p. 1%() his shopping de"ice is used primarily on perisha(le products.
'. Coupons
B& -pen dating
C. 3e(ates
%. Anit pricing
#. Warranty

Difficulty: &e'ium

6-1+
,4. (p. 1%() he partial refund of the price of a product is called
'. Coupons
B. -pen dating
C& 3e(ates
%. Anit pricing
#. Warranty

Difficulty: &e'ium

,5. (p. 1%() his is a !ritten guarantee from the manufacturer that specifies the conditions under
!hich the product can (e returned: replaced: or repaired.
'. Coupons
B. -pen dating
C. 3e(ates
%. Anit pricing
#& Warranty

Difficulty: Easy

,;. (p. 1%() Most products come !ith some guarantee of <uality. Which of the follo!ing is
usually in !ritten form: created (y the seller or manufacturer and has t!o formsD
'. 9's-is9 !arranty
B& #2press !arranty
C. Gull !arranty
%. ?mplied !arranty
#. @imited !arranty

Difficulty: &e'ium

6-1,
.0. (p. 1%() Most products come !ith some guarantee of <uality. his type of !arranty states
that a defecti"e product can (e fi2ed or replaced during a reasona(le amount of time.
'. 9's-is9 !arranty
B. #2press !arranty
C& Gull !arranty
%. ?mplied !arranty
#. @imited !arranty

Difficulty: &e'ium

.1. (p. 1%() Most products come !ith some guarantee of <uality. his type of !arranty co"ers
only certain aspects of the product: such as parts.
'. 9's-is9 !arranty
B. #2press !arranty
C. Gull !arranty
%. ?mplied !arranty
#& @imited !arranty

Difficulty: &e'ium

.&. (p. 1%() Most products come !ith some guarantee of <uality. his type of !arranty co"ers
the product8s intended use or other (asic understandings that are not in !riting.
'. 9's-is9 !arranty
B. #2press !arranty
C. Gull !arranty
'& ?mplied !arranty
#. @imited !arranty

Difficulty: &e'ium

6-1.
.+. (p. 1%() Ste"e (ought a laptop that !as defecti"e. his laptop !ill (e fi2ed or replaced (y the
manufacturer as long as he returns it in a reasona(le amount of time. What type of !arranty
does he ha"e on his laptopD
'. 9's-is9 !arranty
B. #2press !arranty
C& Gull !arranty
%. ?mplied !arranty
#. @imited !arranty

Difficulty: &e'ium

.,. (p. 1%() Gran) (ought some mini-(linds. 'lthough he did not recei"e a !ritten !arranty: the
(linds should (e e2pected to open and close properly. What )ind of !arranty does Gran)
ha"eD
'. 9's-is9 !arranty
B. #2press !arranty
C. Gull !arranty
'& ?mplied !arranty
#. @imited !arranty

Difficulty: &e'ium

... (p. 1%() Haren (ought a mi2er. She recei"ed a !arranty that co"ers only certain aspects of
the product. ?f the product fails: she may (e re<uired to pay part of the costs for shipping or
repairs. Which of the follo!ing !arranties does she ha"eD
'. 9's-is9 !arranty
B. #2press !arranty
C. Gull !arranty
%. ?mplied !arranty
#& @imited !arranty

Difficulty: &e'ium

6-16
.6. (p. 1%1) Mi)e (ought a ne! car. 6is ne! car !arranty pro(a(ly included all e2cept
'. Co"erage of (asic parts against defects
B. Corrosion !arranty
C& #2tended co"erage for air conditioning
%. Possi(ility to transfer the !arranty to other o!ners of the car 0additional charges may
apply1
#. Po!er train co"erage

Difficulty: &e'ium

.4. (p. 1%+) ' ser"ice contract
'. ?s (etter than an e2tended !arranty.
B. ?s an agreement to co"er repair during the implied !arranty period.
C. ?s included automatically !ith the purchase of a "ehicle.
%. Asually does not co"er the engine cooling system.
#& Co"ers the repair costs of a product.

Difficulty: *ar'

.5. (p. 1%,) he te2t identifies se"eral phases in the (uying process. he correct order of the
phases is
'. #"aluating alternati"es: pre-shopping acti"ities: selection and purchase: post-purchase
acti"ities
B. Pre-shopping acti"ities: selection and purchase: e"aluating alternati"es: post-purchase
acti"ities
C& Pre-shopping acti"ities: e"aluating alternati"es: selection and purchase: post-purchase
acti"ities
%. Post-purchase acti"ities: e"aluating alternati"es: pre-shopping acti"ities: selection and
purchase
#. #"aluating alternati"es: selection and purchase: pre-shopping acti"ities: post-purchase
acti"ities

Bloom's: )nalysis
Difficulty: &e'ium

6-14
.;. (p. 1%,) Pro(lem identification is part of the IIII phase of the decision-ma)ing process.
'. #"aluating alternati"es
B. Post-purchase acti"ities
C& Pre-shopping acti"ities
%. Selection and purchase
#. More than one of the a(o"e is correct

Difficulty: &e'ium

60. (p. 1%,) ?nformation gathering is part of the IIII phase of the decision-ma)ing process.
C& Pre-shopping acti"ities
#. -rdering acti"ities

Difficulty: &e'ium

61. (p. 1%1) Comparison of product features is part of the IIII phase of the decision-ma)ing
process.
!& #"aluating alternati"es
C. Pre-shopping acti"ities

Difficulty: &e'ium

6-15
6&. (p. 1%1) Price analysis is part of the IIII phase of the decision-ma)ing process.
!& #"aluating alternati"es

Difficulty: &e'ium

6+. (p. 1%-) $egotiation acti"ities are part of the IIII phase of the decision-ma)ing process.
'& Selection and purchase

Difficulty: &e'ium

6,. (p. 1%-) Choosing the payment method is part of the IIII phase of the decision-ma)ing
process.
'& Selection and purchase

Difficulty: &e'ium

6-1;
6.. (p. 1%%) Properly maintaining and operating the product is part of the IIII phase of the
decision-ma)ing process.
B& Post-purchase acti"ities

Difficulty: Easy

66. (p. 1%%) 3esol"ing purchase concerns is part of the IIII phase of the decision-ma)ing
process.
B& Post-purchase acti"ities

Difficulty: &e'ium

64. (p. 1%,) Which of the follo!ing is the (est !ay to state a pro(lemD
'. ? need to ha"e a car.
B& ? need transportation.
C. ? need a motorcycle.
%. ? need to ha"e a mini"an.
#. ? need to ha"e an SAV.

Difficulty: Easy

6-&0
65. (p. 1%1) Which of the follo!ing sources !ould (e the @#'S helpful !hen purchasing a
"ehicleD
'. Personal contacts to learn a(out product performance
B. Media information !ith purchasing ad"ice
C. ?ndependent testing organiFations li)e Consumers Anion
%. -nline sources !ith product information
#& Bour cousin !ho has ne"er purchased a car

Difficulty: Easy

6;. (p. 1%1) 'll of the follo!ing are appropriate <uestions you could as) (efore ma)ing a ma*or
purchase e2cept
'. ?s it possi(le to delay the purchase or to do !ithout the itemD
B. Should ? pay for the item !ith cash or (uy it on creditD
C. Which (rands should ? considerD
%. 6o! do the price: <uality: and ser"ice compare at different storesD
#& 'll of the a(o"e are <uestions that should (e as)ed.

Difficulty: &e'ium

40. (p. 1%-) Comparison shopping !ill (e (eneficial for (uying all of the follo!ing e2cept
!& ' hot dog at the (ase(all par)
B. Mil) and (read that you (uy !ee)ly
C. ' pet dog
%. Musical instrument accessories that you purchase online
#. 'n e2pensi"e tele"ision

Bloom's: )nalysis
Difficulty: Easy

6-&1
41. (p. 1%-) Comparison shopping !ill (e (eneficial for (uying
'. ?ne2pensi"e items
B. -ne-time purchases of lo! cost products
C. Products !hose prices are the same at all retailers
%. Products !hose <uality is the same at all retailers
#& ?tems that can (e researched easily !ith ad"ertisements

Difficulty: &e'ium

4&. (p. 1%-) Buying a "ehicle can (e a challenging process. When researching a "ehicle: a
consumer may !ant to consider all of the follo!ing e2cept
'. Mechanical de"ices to impro"e performance
B. Con"enience options such as air conditioning
C. 'esthetic features li)e metallic paint
'& 'll of the a(o"e may (e considered
#. $one of the items listed are important !hen (uying a "ehicle

Bloom's: )nalysis
Difficulty: Easy

4+. (p. 1%-) he a"erage used car costs a(out IIIIIII less than the a"erage ne! car.
'. J0
B. J1:000
C& J10:000
%. J&.:000
#. J.0:000

Bloom's: .no/le'ge
Difficulty: &e'ium

6-&&
4,. (p. 1%-) When purchasing a used "ehicle: it is a good idea to
'. a)e out a loan for the entire cost
B. 'ccept the dealer at his !ord a(out the condition of the "ehicle
C& 6a"e a trained and trusted mechanic of your choice chec) out the "ehicle
%. 'll of the a(o"e are correct
#. $one of the a(o"e is correct

Difficulty: &e'ium

4.. (p. 1%-) Which of the follo!ing is an ad"antage of a car leaseD
'. ' large do!n payments is re<uired
B. 't the end of the lease: you ha"e no o!nership interest in the "ehicle
C. he capitaliFed cost is usually higher than the list price
'& Monthly lease payments are usually lo!er than monthly financing payments
#. he total cost of a lease may (e higher than a purchase

Difficulty: &e'ium

46. (p. 1%-) Which of the follo!ing is a disad"antage of a car leaseD
'. ' large do!n payments is re<uired
B& 't the end of the lease: you ha"e no o!nership interest in the "ehicle
C. he capitaliFed cost is usually lo!er than the list price
%. Monthly lease payments are usually lo!er than monthly financing payments
#. Bou can usually o(tain a more e2pensi"e "ehicle than !ith an outright purchase

Difficulty: &e'ium

6-&+
44. (p. 1%8) he amount printed on a la(el that is posted on a "ehicle is called
'. ?n"oice price
B& Stic)er price
C. Set-price
%. CapitaliFed cost
#. 3esidual "alue

Difficulty: &e'ium

45. (p. 1%8) he dealer8s cost is also )no!n as the
!& ?n"oice price
B. Stic)er price
C. Set-price
%. CapitaliFed cost
#. 3esidual "alue

Difficulty: &e'ium

4;. (p. 1%8) ' no-haggling dealer !ill use a0n1 IIIIIII
'. ?n"oice price
B. Stic)er price
C& Set-price
%. CapitaliFed cost
#. 3esidual "alue

Difficulty: &e'ium

6-&,
50. (p. 1%8) he price of a leased "ehicle is )no!n as the
'. ?n"oice price
B. Stic)er price
C. Set-price
'& CapitaliFed cost
#. 3esidual "alue

Difficulty: &e'ium

51. (p. 1%8) he e2pected "alue of a "ehicle at the end of a lease is called the
'. ?n"oice price
B. Stic)er price
C. Set-price
%. CapitaliFed cost
#& 3esidual "alue

Difficulty: &e'ium

5&. (p. 1%8) ?FFy is thin)ing a(out leasing a sports car. She !ill ma)e monthly payments (ased
on a money factor and the IIIIIIIIIIII
'. ?n"oice price
B. Stic)er price
C. Set-price
'& CapitaliFed cost
#. 3esidual "alue

Difficulty: &e'ium

6-&.
5+. (p. 1%8) 6elga plans to purchase a pic)-up truc). She should (egin her price negotiation at
the
!& ?n"oice price
B. Stic)er price
C. Set-price
%. CapitaliFed cost
#. 3esidual "alue

Difficulty: &e'ium

5,. (p. 1%3) ' "ehicle lease has se"eral costs. Which of the follo!ing is the price of the "ehicleD
!& CapitaliFed cost
B. Money factor
C. Payment schedule
%. 3esidual "alue
#. 'll of the a(o"e

Difficulty: &e'ium

5.. (p. 1%3) ' "ehicle lease has se"eral costs. Which of the follo!ing is the interest rate used to
calculate the monthly costD
'. CapitaliFed cost
B& Money factor
C. Payment schedule
%. 3esidual "alue
#. 'll of the a(o"e

Difficulty: &e'ium

6-&6
56. (p. 1%3) ' "ehicle lease has se"eral costs. Which of the follo!ing is the periodic costD
'. CapitaliFed cost
B. Money factor
C& Payment amount
%. 3esidual "alue
#. rade-in "alue

Difficulty: &e'ium

54. (p. 1%3) ' "ehicle lease has se"eral costs. Which of the follo!ing is the e2pected "alue at the
end of the leaseD
'. CapitaliFed cost
B. Money factor
C. Payment amount
'& 3esidual "alue
#. rade-in "alue

Difficulty: &e'ium

55. (p. 1%3) Which of the follo!ing is a cost associated !ith a "ehicle leaseD
'. CapitaliFed cost
B. Money factor
C. Payment amount
%. 3esidual "alue
#& 'll of the a(o"e

Difficulty: Easy

6-&4
5;. (p. 1%8) Eeorge has ne"er (ought a car (efore. Which of the follo!ing techni<ues should he
use to get the (est dealD
'. @o!(alling
B. 6igh(alling
C. @ea"e a deposit to hold the "ehicle
'& 3esearch the actual dealer cost and (egin negotiations from that point
#. ell the dealer the highest monthly payment he can afford

Difficulty: &e'ium

;0. (p. 1%%) ' potential pro(lem !ith ha"ing a long car loan is
'. @o! monthly payments
B. @o!-interest loan
C& $egati"e e<uity
%. @oan preappro"al
#. 'll of these are potential pro(lems

Difficulty: &e'ium

;1. (p. +(() Which of the follo!ing is correct a(out the lemon la!D
'. ?t applies !hen a "ehicle has (een out of ser"ice for 60 days.
B. ?t !as enacted in ,. of the .0 states.
C. ?t re<uires a refund for the "ehicle after the o!ner has made repeated attempts to o(tain
financing.
'& ?t applies to "ehicles that ha"e (een ser"iced four times to correct the same pro(lem in the
first 1&:000 miles.
#. ?t applies to (oth ne! and used "ehicle purchases.

Difficulty: &e'ium

6-&5
;&. (p. +(() ' "aria(le operating cost for a "ehicle is
'. %epreciation
B. ?nsurance
C. ?nterest on an auto loan
%. @icense and registration
#& Maintenance and repairs

Difficulty: &e'ium

;+. (p. +(() 'll of the follo!ing are fi2ed operating costs for a "ehicle e2cept
'. %epreciation
B. ?nsurance
#& Maintenance and repairs

Difficulty: &e'ium

;,. (p. +(() ' fi2ed operating cost for a "ehicle is
!& %epreciation
B. Easoline and oil
C. Maintenance and repairs
%. Par)ing
#. ires

Difficulty: &e'ium

6-&;
;.. (p. +(() 'll of the follo!ing are "aria(le operating costs for a "ehicle e2cept
!& %epreciation
B. Easoline and oil
C. Maintenance and repairs
%. Par)ing
#. ires

Difficulty: &e'ium

;6. (p. +(() he largest fi2ed e2pense associated !ith a ne! automo(ile is
!& %epreciation
B. ?nsurance
#. Maintenance and repairs

Difficulty: &e'ium

;4. (p. +(() Which of the follo!ing costs !ill directly increase !ith the num(er of miles
dri"enD
'. %epreciation
B& Easoline
C. ?nsurance
%. ?nterest on an auto loan
#. @icense and registration

Difficulty: &e'ium

6-+0
;5. (p. +(1) Craig !ants to get his old car repaired: (ut he doesn8t !ant to spend "ery much
money. 6e pro(a(ly !ill $- !ant to go to a
!& Car dealer
B. ?ndependent auto repair shop
C. Mass merchandise retailer
%. Ser"ice station
#. Specialty shop

Difficulty: &e'ium

;;. (p. +(1) Most customer complaints result from the follo!ing e2cept
'. %ecepti"e pricing
B. %efecti"e products
C& @ong product li"es
%. @o! <uality products
#. Ane2pected costs

Difficulty: &e'ium

100. (p. +(1) Paul (ought some (ad gasoline that damaged the gas tan) of his "ehicle.
'. 6e should sue the gas station !here he (ought his gas.
B. 6e ne"er should ha"e e2pected any pro(lems !ith (uying any product: especially gas for
his car.
C& 6e should pro"ide the gas station !ith documentation of his purchase and all repair costs.
%. 6e should assume that the gas station should (e a(le to trac) his purchase (ased on "ideo
cameras.
#. 'll of the a(o"e are correct.

Difficulty: &e'ium

6-+1
101. (p. +(1) hin) a(out consumer complaints. Which of the follo!ing is correctD
'. he first step is to contact the company head<uarters.
B. ?f you don8t get satisfaction from the local store: you should ta)e legal action as the ne2t
step.
C. 'n ar(itrator !ill pro"ide a non(inding process to settle your differences.
'& ?f you don8t get satisfaction from !or)ing !ith head<uarters: you may get assistance from
a mediator in order to a"oid legal action.
#. $one of the a(o"e is correct

Difficulty: &e'ium

10&. (p. +(,) ' process used to settle grie"ances using a non(inding process is called a0n1
'. 'r(itration
B. County health department
C. @a!suit
'& Mediation
#. !o of the a(o"e are correct

Difficulty: &e'ium

10+. (p. ,(+) amra !ent to a restaurant and had an unpleasant e2perience that sent her to the
hospital. he pro(lems at the restaurant should (e handled (y
'. 'r(itration
B& County health department
C. @a!suit
%. Mediation
#. he doctor !ho treated her

Difficulty: &e'ium

6-+&
10,. (p. +(-) Which of the follo!ing is not a legal option for upper-income consumersD
'. Class-action la!suits
B. @a!yer
C& @egal aid society
%. Prepaid legal ser"ices
#. Small claims court

Difficulty: *ar'

10.. (p. +(0) Sally has a ma*or pro(lem !ith a product and thin)s that many others ha"e had the
same pro(lem. Which of the follo!ing is the (est !ay to resol"e the pro(lemD
!& Class-action la!suit
B. @a!yer
C. @egal aid society
%. Prepaid legal ser"ice

Difficulty: *ar'

106. (p. +(-) Ste"en needs to !rite a !ill. 6is (est resource is 0a1
'. Class-action la!suit
B& @a!yer
%. Prepaid legal ser"ice

Difficulty: &e'ium

6-++
104. (p. +(-) 'dolph has a lo! income and needs legal assistance. 6e should ma)e use of 0a1
B. @a!yer
C& @egal aid society

Difficulty: &e'ium

105. (p. +(3) ?f you !ant to pay a set fee to recei"e unlimited or reduced-fee assistance: you
should use 0a1
B. @a!yer
'& Prepaid legal ser"ices

Difficulty: &e'ium

10;. (p. +(0) ?f you ha"e a pro(lem !hose remedy !ill (e J1.00 - J+000: the appropriate tool to
use !ould (e 0a1
B. @a!yer
#& Small claims court

Difficulty: &e'ium

6-+,
110. (p. 188) he unit price of a & pound 0+& ounces1 (o2 of (ro!n sugar that costs J+.&0 is
!& J0.10 per ounce
B. J0.10 per pound
C. J1.60 per ounce
%. J+.&0 per pound
#. J6.,0 per pound
otal costKL ounces M costKounce M J+.&0K0+&1 M J0.10.

Bloom's: )pplication
Difficulty: &e'ium

111. (p. 188) he unit price of a 6, ounce carton of orange *uice that costs J+.&0 is
!& J0.0. per ounce
B. J0.10 per ounce
C. J0.&0 per ounce
%. J1.00 per ounce
#. J+.&0 per ounce
otal costKL ounces M costKounce M J+.&0K06,1 M J0.0..

Difficulty: Easy

6-+.
11&. (p. 1%,) Asing the follo!ing information: !hat is the cost to (uy a carD
%o!n payment J&000
&onthly loan payment 0J+00 per month for a .-year loan1
-pportunity cost of do!n payment 0J&000 loan period 0in years1 &N interest1
#stimated "alue of "ehicle at end of o!nership period 0J&:0001
'. J&:000
B. J15:000
C& J15:&00
%. J&0:000
#. J&0:&00
otal (uying cost M %o!n payment O total monthly loan payment O opportunity cost -
estimated "alue at end of o!nership M J&000 O 0J+00 . years 1& months1 O 0J&000 .
years &N1 - J&000 M J&000 O J15:000 O J&00 - J&000 M J15:&00

Difficulty: *ar'

11+. (p. 1%,) Asing the follo!ing information: !hat is the cost to lease a carD
Security deposit J&.0
Monthly lease payment 0J+00 per month for a ,-year lease1
-pportunity cost of do!n payment 0J&.0 loan period 0in years1 &N interest1
#nd-of-lease charges J500
'. J1+:6&0
B& J1+:540
C. J1,:,00
%. J1,:640
#. J1.:,40
otal (uying cost M Security deposit O total monthly lease payment O opportunity cost O end-
of-lease charges M J&.0 O 0J+00 , years 1& months1 O 0J&.0 , years &N1 O J500 M
J&.0 O J1,:,00 O J&0 O J500 M J1.:,40

Difficulty: *ar'

6-+6

FINC298 Chap 006

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Chapter 06 - Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

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