IEM Economics (2nd Edition) Unit 1, Quiz 1

What is the purpose of interest?

It allows the lender to make money in exchange for giving money to those who need it.

Does the statement concern Economic Perspective or Scarcity? Many parents are unable to find and purchase a popular toy at Christmastime.

S - Scarcity

Economic Perspective

Weighs the costs and benefits of each measure before making an economic decision.

The scenario best explains scarcity.

A man has $20 but wants to take his girlfriend to a fancy steak restaurant, where he needs $70.

Scarcity

A problem created by unlimited wants and limited resources.

What segment of U.S. society represents a challenge to the Social Security system?

Baby Boomer Generation

The ________ is an organization that works to protect consumers.

Better Business Bureau

Which government agency deals most directly with consumers and their rights and protection?

Federal Trade Commission

Which portion of U.S. government spending took up the largest percentage of the 2016 budget?

Healthcare

Unsecured Debt

Money owed that imposes a higher interest rate because repayment is not guaranteed.

Choosing between spending money on a new suit or a vacation is an example of ________.

Opportunity Cost

What represents things you miss out on when you decide to spend your money on something else?

Opportunity Cost

In 1962, President John F. Kennedy made a speech in which he spelled out the rights that a consumer has when purchasing something. Which of these was NOT included in Mr. Kennedy's speech?

Right to redress

What country's collapse greatly altered U.S. military spending?

Russia

Which country's collapse greatly altered U.S. military spending?

Russia

Credit refers to __________________.

a consumer's record of going into and getting out of debt in a faithful and punctual way.

What aspect of government spending recently increased greatly in the spring of 2010?

healthcare spending

When a shopper makes a rational choice, he or she ______________.

picks the item on sale.

What is the biggest responsibility that consumers have?

to educate themselves on the products they are interested in, including their benefits and potential costs or problems.

Secured Debt

Money owed that is guaranteed by the thing it is used to purchase.

The U.S. government debt in 2015 was about ________.

$14 trillion

Which of these represents things you miss out on when you decide to spend your money on something else? 1. Economic Perspective 2. Opportunity Cost 3. Rational Choice 4. Debt 5. Scarcity

2. Opportunity Cost

Which purchase requires good credit? 1. movies 2. antiques 3. flat-screen TV 4. house 5. books

4. house

Which decision not on made with an economic perspective? 1. A young professional chooses the least expensive of two houses so that she can use the difference of price to fix up her new home just the way she likes it. 2. A young man buys an old car without thinking about the costs associated with fixing the vehicle, and the fact that it will probably only last for months. 3. A boy considered buying three packs of baseball cards but decided against it when he realized that the same price of the three packs could get him a ticket to a baseball game, which he valued higher. 4. A young investor chooses to take a portion of his life savings and buy some property in an area that might be developed in the next five years. 5. A college student decided not to take a German class. Instead, she signed up and paid for a calculus class that would assist in a summer internship that could lead to a well-paying job after graduation.

5. A college student decided not to take a German class. Instead, she signed up and paid for a calculus class that would assist in a summer internship that could lead to a well-paying job after graduation.

What country owns a large portion of U.S. debt?

China

Does the statement concern Economic Perspective or Scarcity? A rise in the price of groceries results in consumers spending less on entertainment.

E - Economic Perspective

Does the statement concern Economic Perspective or Scarcity? A woman reviews her budget, debt, and spending habits when considering whether to purchase a home.

E - Economic Perspective