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Purchasing Unit Review

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1. If the cost of an oil change is $30 and you change your oil every 3,000 miles, what is the cost per mile?

a. $0.01b. $0.03c. $0.10d. $0.30

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2. Teenagers see about ______ advertisements per day.

a. 1,000b. 2,000c. 3,000d. 4,000ily know

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3. Which of the following would NOT be a factor when calculating the true cost per mile for a car:

a. Depreciationb. Cost of insurancec. Cost of gas & oil changesd. Cost of interest, if

purchased with a car loane. Cost of maintenance &

repairsf. All of the above are factors

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4. True or False:

It is usually best to negotiate a deal for a car by starting with the MSRP and working downward from there.

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5. The MSRP of a car is the:

a.Dealer’s cost of the carb.True market value that

will you likely pay for the car

c. The sticker price on the window of the car

d.The dealer’s invoice price for the car

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6. True or False:

A single class action law can be filed covering individuals who suffer from different problems by the same company.

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7. True or False:

The best times to buy a car is usually at the beginning of the month or when the dealer advertises a sale in the newspaper.

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8. If gas costs $2.49 per gallon and your car gets 25 miles per gallon, what is the approximate cost per mile?

a. $0.01b. $0.02c. $0.10d. $0.25

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9. True or False:

The monthly cost to lease a car is typically less than the monthly cost to buy it with a car loan.

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10. Which of the following should you do FIRST in order to make a good purchasing decision?

A. Search for informationB. Recognize the problemC. Do a post-purchase

evaluationD. Make the purchase decisionE. Evaluate the alternatives

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11. What magazine should you check out before making any important purchases?

a. Consumer Digestb. Consumer Reportsc. Consumer Inquestd. Consumer News

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12. True or False:

An express warranty is an unwritten guaranty from the seller outlining the conditions under which a product can be returned.

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13. If car repairs cost $4,000 over 5 years and you drive 12,000 miles per year, what is the cost per mile?

a. $0.07b. $0.12c. $0.33d. $3.00

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14. True or False:

Arbitration is generally a binding form of dispute resolution.

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15. True or False:

Dealer incentives are reductions in price which are paid by the car dealership.

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16. True or False:

Increasing the down payment on a lease will reduce the monthly lease payments.

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17. Which of the following should you do FIRST if you have a complaint about a purchase?

A. Contact a consumer agencyB. Contact company

headquartersC. Initiate dispute resolutionD. Return to the place of

businessE. Take legal action

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18. True or False:

You should bring all your pricing and other research to the dealer with you.

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19. _________ is the estimated value of a car at the end of a lease period.

A. Gross Cap CostB. DepreciationC. Adjusted Cap CostD. Money FactorE. ResidualF. Lease Quotient

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20. The money factor for a lease is:

A. The interest rate times 2400B. The interest rate divided by

2400C. Multiplied by (the cap cost

minus the residual) to determine the interest on a lease

D. Divided by (the cap cost minus the residual) to determine the interest on a lease

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21. True or False:

Fraud is a dishonest business practice which a seller tries to deceive or mislead the buyer.

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22. True or False:

If offered an extended service contract on a product, you should usually take it.

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23. True or False:

When shopping for a car, you should start at the nearest dealer since you will likely wind up buying it there eventually anyway.

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24. Which of the following would handle an issue such as the recall of the lawnmower which might pose a fire risk?

a. Consumer Product Safety Council

b. Food & Drug Administration

c. Better Business Bureaud. Consumer Advocacy

Board

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25. True or False:

The maximum amount you could recover in small claims court is $3,000 for most disputes in New Jersey.

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26. Which of the following is NOT a consumer agency run by the US government?

a. Consumer Product Safety Council

b. Food & Drug Administration

c. Better Business Bureaud. All of the above are run by

the US government

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27. True or False:

The price of most things you can purchase at a Car Dealer F&I Office (e.g. an extended warranty) are not negotiable.

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28. Which of the following is the best thing you should consider buying at the Car Dealer F&I Office?

a. Extended warrantyb. Undercoatingc. VIN etchingd. Paint sealante. Gap insurancef. Maintenance plan