Question 1

A disadvantage of leasing an automobile would be the:

Accepted Answer

A)  relatively high cost of the security deposit.
B)  the higher monthly payment as compared to a purchase.
C)  poor expense records for tax purposes.
D)  additional costs for turning the car in early.
E)  responsibility for fuel expenses.F) D) and E)
G) B) and D)

Question 2

Stephanie Johns is a member in a store that is a nonprofit organization that buys grocery items in bulk.The savings on these bulk purchases are passed on to the members in the form of lower food prices.Stephanie is most likely shopping in which type of store?

Accepted Answer

A)  Department store
B)  Specialty store
C)  Discount store
D)  Convenience store
E)  CooperativeF) A) and B)
G) B) and D)

Question 3

What are the common sources of consumer information to assist consumers in making wise buying decisions?

Accepted Answer

Answers will vary.Sources of information...

Question 4

The process of resolving conflicts between a customer and a business with the use of a third party whose recommendations are nonbinding is called:

Accepted Answer

A)  mediation.
B)  arbitration.
C)  a class action suit.
D)  a product lawsuit.
E)  a small claims court hearing.F) B) and E)
G) None of the above

Question 5

Brian Williams has a piece of paper that he gives to the cashier when he purchases a grocery item that saves him a dollar off the cost of that item.What is he most likely using?

Accepted Answer

A)  Coupon
B)  Rebate
C)  Warranty
D)  Receipt
E)  Promissory noteF) B) and C)
G) A) and D)

Question 6

The first phase in the buying process involves information gathering.

Accepted Answer

A) True 
 B)False

Question 7

An implied warranty of merchantability guarantees that:

Accepted Answer

A)  the buyer must pay for all warranty repair costs.
B)  the manufacturer must cover all warranty repair costs.
C)  a toaster must toast bread.
D)  a used car must come with a radio.
E)  a new car must come with a MP3 player.F) All of the above
G) A) and C)

Question 8

Which one of these statements best describes a criticism of automobile service contracts?

Accepted Answer

A)  Repair companies provide poor service.
B)  Service contracts are included in the initial price of the product and thus are not optional.
C)  The government regulation of service contract companies is weak.
D)  The contracts do not always include everything you might expect.
E)  There are a limited number of authorized repair facilities.F) B) and D)
G) A) and E)

Question 9

Which of the following is true of automobile service contracts?

Accepted Answer

A)  Automobile service contracts are warranties.
B)  Automobile service contracts can cover repairs not included in the manufacturer's warranty.
C)  Automobile service contracts are free.
D)  Automobile service contracts are always a wise financial decision.
E)  Automobile service contracts usually cost less than $200.F) None of the above
G) A) and E)

Question 10

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

Accepted Answer

A)  Automatic ownership interest in the car
B)  Unlimited mileage on the car
C)  No need to meet credit requirements
D)  Lease payments are likely to be lower than loan payments
E)  Additional costs to turn the car in early.F) A) and E)
G) All of the above

Question 11

Proper vehicle maintenance is essential to extending the life of your car.Regular oil changes should occur every ________ miles,depending on recommendations for the vehicle.

Accepted Answer

A)  6,000
B)  3,000 - 5,000
C)  6,000 - 10,000
D)  2,000 - 3,000
E)  10,000F) C) and D)
G) A) and C)

Question 12

The purpose of the invoice price is to inform customers of the:

Accepted Answer

A)  sales tax on the vehicle.
B)  suggested retail price.
C)  sticker price.
D)  charge for optional extras.
E)  dealer's cost.F) D) and E)
G) C) and E)

Question 13

A used car sold "as is" has:

Accepted Answer

A)  a limited warranty.
B)  an implied warranty of merchantability
C)  a 30-day guarantee.
D)  a full warranty on parts but not labor.
E)  a 90-day guarantee.F) D) and E)
G) C) and D)

Question 14

The main purpose of Consumers Union is to:

Accepted Answer

A)  report the quality of products and services.
B)  reduce fire hazards of home appliances.
C)  handle consumer complaints from government workers.
D)  represent the government in consumer complaint hearings.
E)  provide environmental information on automobiles.F) A) and D)
G) D) and E)

Question 15

Which of the following is the largest fixed expense associated with a new automobile?

Accepted Answer

A)  Insurance
B)  Gasoline
C)  Registration,license,and fees
D)  Parking
E)  DepreciationF) None of the above
G) A) and C)

Question 16

For a situation to qualify as a class-action suit,it must:

Accepted Answer

A)  involve several people who have suffered the same problem.
B)  involve a national retail store.
C)  be a case that would not be handled by an attorney.
D)  involve low-income individuals.
E)  be a legal problem against a government agency.F) B) and E)
G) B) and C)

Question 17

Which organization tests products for electrical and fire safety to assure items meet safety standards?

Accepted Answer

A)  Consumers Watch
B)  Better Business Bureau
C)  Consumer Product Safety Commission
D)  Underwriters Laboratories
E)  Federal Trade CommissionF) B) and C)
G) A) and E)

Question 18

An automobile service contract can:

Accepted Answer

A)  reduce operating costs of the vehicle.
B)  cover regular maintenance.
C)  provide automobile insurance at a discount.
D)  cover repairs not included in the manufacturer's warranty.
E)  help the buyer stay informed of government safety recalls.F) All of the above
G) A) and E)

Question 19

Sloane owes $2,450 on her car loan.According to Edmund's Used Car Prices,her car is valued at $1,850.The term used to refer to this situation is:

Accepted Answer

A)  residual value.
B)  pre-approval.
C)  capitalized cost.
D)  upside-down.
E)  money factor.F) B) and C)
G) None of the above

Question 20

Government agencies provide education programs and complaint hotlines to assist consumers in gathering information to make wise buying decisions.

Accepted Answer

A) True 
 B)False

Exam 8: Consumer Purchasing Strategies and Legal Protection

Proper vehicle maintenance is essential to extending the life of your car.Regular oil changes should occur every ________ miles,depending on recommendations for the vehicle.

Correct AnswerverifiedShow Answer

The main purpose of Consumers Union is to:

Correct AnswerverifiedShow Answer

Brian Williams has a piece of paper that he gives to the cashier when he purchases a grocery item that saves him a dollar off the cost of that item.What is he most likely using?

Correct AnswerverifiedShow Answer

For a situation to qualify as a class-action suit,it must:

Correct AnswerverifiedShow Answer

A disadvantage of leasing an automobile would be the:

Correct AnswerverifiedShow Answer

An implied warranty of merchantability guarantees that:

Correct AnswerverifiedShow Answer

Which of the following is the largest fixed expense associated with a new automobile?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The first phase in the buying process involves information gathering.

Correct AnswerverifiedShow Answer

Which of the following is true of automobile service contracts?

Correct AnswerverifiedShow Answer

What are the common sources of consumer information to assist consumers in making wise buying decisions?

Correct AnswerverifiedAnswers will vary.Sources of information...View AnswerShow Answer

Sloane owes $2,450 on her car loan.According to Edmund's Used Car Prices,her car is valued at $1,850.The term used to refer to this situation is:

Correct AnswerverifiedShow Answer

A used car sold "as is" has:

Correct AnswerverifiedShow Answer

The purpose of the invoice price is to inform customers of the:

Correct AnswerverifiedShow Answer

Government agencies provide education programs and complaint hotlines to assist consumers in gathering information to make wise buying decisions.

Correct AnswerverifiedShow Answer

The process of resolving conflicts between a customer and a business with the use of a third party whose recommendations are nonbinding is called:

Correct AnswerverifiedShow Answer

Which one of these statements best describes a criticism of automobile service contracts?

Correct AnswerverifiedShow Answer

An automobile service contract can:

Correct AnswerverifiedShow Answer

Stephanie Johns is a member in a store that is a nonprofit organization that buys grocery items in bulk.The savings on these bulk purchases are passed on to the members in the form of lower food prices.Stephanie is most likely shopping in which type of store?

Correct AnswerverifiedShow Answer

Which organization tests products for electrical and fire safety to assure items meet safety standards?

Correct AnswerverifiedShow Answer

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Answers will vary.Sources of information...
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