Podcast
Questions and Answers
Which activity is done in Step 2 of comparison shopping?
Which activity is done in Step 2 of comparison shopping?
Assess the purchase objectively.
Why do prices increase when demand for a product is high?
Why do prices increase when demand for a product is high?
Companies know that people will be willing to spend more to get an in-demand product.
Which statements apply to leasing a car? (Select all that apply)
Which statements apply to leasing a car? (Select all that apply)
Which strategy best helps a famous brand company reach consumers?
Which strategy best helps a famous brand company reach consumers?
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A monthly fixed-rate mortgage payment never changes.
A monthly fixed-rate mortgage payment never changes.
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For which product(s) would it be most beneficial to wait before buying?
For which product(s) would it be most beneficial to wait before buying?
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Why is building equity in a home a good thing?
Why is building equity in a home a good thing?
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Which of the following illustrates the most economically sound choice for Brad?
Which of the following illustrates the most economically sound choice for Brad?
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Why might people choose to rent a home rather than buy a home?
Why might people choose to rent a home rather than buy a home?
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At what point does buying in bulk stop being a wise spending choice?
At what point does buying in bulk stop being a wise spending choice?
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Study Notes
Comparison Shopping
- Step 2 involves assessing the purchase objectively to make informed decisions.
Price Dynamics
- Prices rise when demand is high because companies capitalize on consumers’ willingness to pay more for in-demand products.
Leasing a Car
- Important considerations for car leasing include:
- The requirement to return the car at the end of the lease.
- Potential penalties for early termination of the lease.
- Mileage restrictions imposed on the leased vehicle.
Advertising Strategies
- National advertising is crucial for famous brand companies to effectively reach a broad consumer base.
Mortgage Payments
- Fixed-rate mortgage payments remain constant throughout the loan term, providing financial predictability.
Purchase Timing
- For optimal savings, it is advisable to wait before purchasing a smartphone due to its fluctuating pricing history.
Building Equity
- Building equity in a home enhances the homeowner’s net worth, making it a financially beneficial endeavor.
Economic Choices
- For an individual like Brad, who has stable employment and plans to stay long-term, the most economically sound decision is to buy both a car and a home to build equity and credit.
Renting vs. Buying
- Individuals might opt to rent a home instead of buying if they face job relocation, which makes homeownership less practical.
Bulk Purchasing
- Buying in bulk becomes unwise when consumers purchase more than they actually need, leading to potential waste or unnecessary spending.
Studying That Suits You
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Description
Test your knowledge with these spending flashcards that cover key concepts in comparison shopping and consumer behavior. From understanding price increases due to demand to the specifics of leasing a car, this quiz will enhance your financial literacy.
