Money In Review - Unit 3 Chapter 7 Flashcards

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Questions and Answers

What is foreclosure?

The process by which the holder of a mortgage sells the property of a homeowner who has not made interest and or principal payments on time as stipulated in the mortgage contract.

What is markup?

The difference between the wholesale price and retail price.

What is walk-away power?

The ability to walk away from a purchase when negotiating.

What is a cost-benefit analysis?

The process of quantifying costs and benefits of a decision. Signup and view all the answers

What is an auction?

A public sale in which property or items of merchandise are sold to the highest bidder. Signup and view all the answers

What is a consignment shop?

A retail store where people sell items and the owner of the shop gets a percentage of the sale. Signup and view all the answers

What is an estate sale?

A type of yard sale with more items, usually the entire contents of a household. Signup and view all the answers

What does integrity refer to in terms of consumer behavior?

Having to do with a person's honesty and moral attributes. Signup and view all the answers

What does it mean to negotiate?

To bargain for a lower price. Signup and view all the answers

Using cash gives you more bargaining power than using credit.

True Signup and view all the answers

Being married or emotionally attached to a purchase will cause you to lose bargaining power.

True Signup and view all the answers

Getting the best deal on a purchase involves doing all of the following except _____

Being first in line for a new product. Signup and view all the answers

Which of the following is typically not a good place to find a deal?

Mall Signup and view all the answers

What are the benefits of being a wise consumer?

Saves money and better deals. Signup and view all the answers

How can walk-away power be used as a negotiating tool?

Being married to a purchase can stop you from getting a deal; people will go down lower if you say no. Signup and view all the answers

Why is honesty an important component of bargaining?

You get what you pay for. Signup and view all the answers

What is the cost benefit of buying slightly outdated products?

The price is lower. Signup and view all the answers

Study Notes

Key Terminology and Definitions

Foreclosure: Legal process where a mortgage holder sells a homeowner's property due to missed payments, as specified in the mortgage agreement.
Markup: Difference between wholesale and retail prices, indicating profit margin on items sold.
Walk-away power: The strategic ability to abandon a purchase during negotiations to leverage better deals.
Cost-Benefit Analysis: Method for evaluating the pros and cons of a decision by quantifying associated costs and benefits.
Auction: Public sale where items are sold to the highest bidder, often attracting competitive bids.
Consignment Shop: Retail outlet where individuals sell their items; the shop earns a percentage of each sale.
Estate Sale: A comprehensive sale event, usually including all contents of a home, often conducted when someone is moving or has passed away.

Consumer Behavior and Negotiation

Integrity: Essential moral and ethical attribute related to honesty in transactions and negotiations.
Negotiate: The process of discussing a price to reach an agreement, often aiming for lower costs.
Cash vs. Credit: Utilizing cash enhances negotiating power over using credit, often leading to better deal outcomes.
Emotional Attachment: Being overly attached to a potential purchase can diminish one's negotiation leverage.

Purchasing Strategies

Best Deal Tactics: Achieving advantageous purchases involves multiple strategies; being first in line for new products does not guarantee the best deals.
Good Deal Locations: Generally, malls are not ideal venues for finding discounts; alternative locations may yield better offers.
Wise Consumer Benefits: Smart purchasing behaviors can lead to significant savings and more favorable deals.

Negotiation Insights

Utilizing Walk-Away Power: A tactical move in negotiations; detachment from a desired purchase can encourage sellers to offer lower prices.
Honesty in Bargaining: Maintaining honesty during negotiations assures fair pricing and value for money, reinforcing trust between parties.

Practical Considerations

Outdated Product Benefits: Purchasing slightly outdated items typically results in lower costs, presenting value for budget-conscious consumers.

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Description

Test your knowledge on key financial terms from Dave Ramsey's Money In Review, specifically Unit 3 Chapter 7. This quiz covers concepts such as foreclosure, markup, and walk-away power. Perfect for mastering important financial vocabulary!