Chapter 12 - Household Purchases

Question 1

Name the requirements for a hire purchase advertisement.

Answer 1

1. Cash price of the good.
2. Total cost of the good using hire purchase.
3. The number of payments and the amount of each payment.
4. How often the payments have to be made.
5. If a deposit or end payment is required.
6. The APR of interest.

Question 2

Name three ways of paying for goods and services.

Answer 2

1. Cash purchase
2. Credit purchase
3. Hire purchase

Question 3

List three outcomes of cash purchases.

Answer 3

1. Customer becomes owner of goods immediately.
2. Payment passes to seller immediately.
3. You do not build up any debts.

Question 4

List four outcomes of credit purchases.

Answer 4

1. Customer receives the goods immediately.
2. Electricity, telephone bills can be paid this way.
3. No extra charge for the credit, provided that the bills are paid on time.

Question 5

List three outcomes of renting or leasing.

Answer 5

1. Consumer is never the owner of the good.
2. Consumers do not have to spend a large amount of money buying an item that they only need for a short period of time.
3. You may end up paying more in the long term than the good is actually worth.

Question 6

List two outcomes of credit cards and store cards.

Answer 6

1. Consumer receives up to one month credit before they have to pay for goods and services purchased.
2. They can lead to impulse buying.