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1. | Disposable income is defined as __________
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| a) the money income a person has left after all taxes have been paid.
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| b) an individual's annual money income before taxes.
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| c) income spent on necessary goods and services.
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| d) income spent on entertainment and luxury items.
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2. | All of the following would be considered discretionary spending EXCEPT __________
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| a) buying a CD-player.
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| b) going to a movie.
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| c) paying the electric bill.
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| d) having lunch in a restaurant.
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3. | When making a decision to buy something, you should consider each of the following questions EXCEPT __________
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| a) Do I really need this item?
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| b) What quality will I be satisfied with?
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| c) How much time, effort, and money should I spend to maintain the item?
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| d) What do my friends want me to buy?
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4. | Which of the following statements is the best advice about how much information you should gather when deciding to buy something?
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| a) Time is valuable-obtain only as much information as is worthwhile.
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| b) The more time you spend, the better your decision will be.
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| c) Time is valuable-wasting time to gather information is the same as wasting money.
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| d) The less valuable your time is, the less time you should spend gathering information.
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5. | The main purpose of competitive advertising is to __________
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| a) give important information about the advertised product.
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| b) give important information about competing products.
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| c) persuade consumers to buy the advertised product because it is superior.
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| d) sell consumers a higher-priced product than that which is advertised.
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6. | Reading newspaper advertisements for snowboards, calling retail stores for prices, asking salespeople about features of the snowboards they stock, and browsing the Internet for information about the different snowboards on the market are all examples of __________
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| a) using advertising wisely.
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| b) comparison shopping.
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| c) using the bait and switch technique.
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| d) spending too much time on the decision making process.
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7. | The right to redress is the right to __________
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| a) be protected against goods that are dangerous to life and health.
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| b) obtain from manufacturers adequate payment in money or goods for financial or physical damages caused by their products.
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| c) have a basis for reasoned choices.
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| d) assume that advertising is truthful and accurate.
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8. | The agency that could best help a consumer who has been swindled out of money by a fraudulent sweepstakes letter is the __________
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| a) U.S. Postal Service.
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| b) U.S. Department of Agriculture.
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| c) Food and Drug Administration.
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| d) Federal Trade Commission.
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9. | As a consumer, your responsibilities include __________
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| a) trying to fix a refrigerator yourself before reporting the problem.
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| b) keeping warranties in a safe place, but not necessarily reading them.
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| c) contacting a consumer agency before contacting the manufacturer or retailer.
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| d) exhibiting ethical behavior.
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