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Questions and Answers

A monthly fixed-rate mortgage payment:

  • Decreases annually
  • Never changes (correct)
  • Increases annually
  • Could change

This chart shows the actual pricing history for three items. For which product(s) would it be most beneficial to wait before buying?

  • Smartphone and game system
  • Smartphone (correct)
  • DVD and smartphone
  • Game system

Which strategy best helps a famous brand company reach consumers?

  • Advertising nationally (correct)
  • Sending out mailings in small towns
  • Marketing selectively
  • Selling at trade shows

At what point does buying in bulk stop being a wise spending choice?

<p>When the consumer buys more than is needed (C)</p> Signup and view all the answers

Why do prices increase when demand for a product is high?

<p>Companies know that people will be willing to spend more to get an in-demand product. (B)</p> Signup and view all the answers

Which details apply to a financing contract? Check all that apply.

<p>Requires a signature for rent-to-own agreements (A), Includes interest rate information (C), Requires a credit check (E)</p> Signup and view all the answers

What is the purpose of comparison shopping?

<p>Attempting to find the best deal on a product (D)</p> Signup and view all the answers

Which questions should someone ask when deciding whether to lease or buy a car? Check all that apply.

<p>How much do I want to spend? (A), How long do I want the car? (B), Will I use it more than the allowed lease mileage? (C)</p> Signup and view all the answers

Which statements apply to leasing a car? Check all that apply.

<p>There are mileage restrictions on the car. (A), There are penalties for ending the lease early. (C), You must return the car after the lease ends. (D)</p> Signup and view all the answers

Based on the scenario, Raoul should:

<p>Lease a new car (A)</p> Signup and view all the answers

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Study Notes

Mortgage Payments

  • Monthly fixed-rate mortgage payments remain constant over time.

Pricing History

  • Delaying the purchase of a smartphone is recommended based on pricing history.

Marketing Strategy

  • National advertising is the most effective strategy for famous brand companies to reach consumers.

Bulk Buying

  • Purchasing in bulk becomes unwise when consumers acquire more items than necessary.

Demand and Pricing

  • Companies raise prices during high demand, knowing consumers are willing to pay more.

Financing Contracts

  • Financing contracts typically require a credit check, include interest rate details, and need a signature for rent-to-own agreements.

Comparison Shopping

  • The primary goal of comparison shopping is to find the best deal on a product.

Car Leasing vs. Buying

  • Considerations when deciding to lease or buy a car include permissible mileage, desired duration of use, and budget.

Car Leasing Details

  • Leasing a car involves mileage restrictions, mandatory return at lease end, and potential penalties for early termination.

Scenario Analysis

  • In the scenario, Raoul should lease a new car due to limited funds for repair and maintenance while maintaining a steady job.

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