Economic Roles: Quiz 1

Select the different types of taxes.

-income -sales -property

On which form do you file your taxes?

1040

High wages

Good benefit package

consumer rights

laws that protect people who make purchases

Employers are willing to pay ______ and _____ to workers, because they expect to be able to sell the goods and services at prices high enough to cover the costs of production.

wages; salaries

innovation

when an invention becomes usable in a way that has economic value

voluntary

willing

Grace makes $2,200 per month. She spends $300 on credit card payments, $120 per month for a furniture purchase, and $450 on an auto loan. Does she have excessive debt?

yes

annual percentage yield

(APY); the amount of interest you will earn in one year from a savings account

Garnishment is when finance charges are added to your credit card account when the bill is unpaid.

False

Phishing is looking for and reporting online scams.

False

IRS

Internal Revenue Service; a government agency that is responsible for collecting taxes

_____ productive workers are likely to be of greater value and earn higher wages than _____ productive workers.

More; less

Select the items that describe incentives for an employee to accept a job offer.

Safe work environment

insurance policy

an agreement to cover or reimburse an individual for a loss that occurs

subprime lending

loans with very high interest rates

You are running a business, and each good that you produce costs $1.50. In order to earn a profit, you could choose a price of _____ for your product.

$2.00

Which of the following phrases describe labor?

-A human resource and factor of production -Includes teachers, pilots, and doctors -Earns wages or salaries -Used to produce goods and services

Select the true statement(s) about entrepreneurs.

-A small business owner may be an entrepreneur and a producer. -Entrepreneurs believe they can make a profit from their invention. -Entrepreneurs usually work longer hours than most people.

There are several steps to opening a savings account. Select all of these steps.

-Choose a director for the account. -Fill out a deposit slip and deposit at least the minimum amount of money. -Go to the bank and sign the necessary bank forms. -Collect all the required information.

Which of the following economic questions involve the consumer?

-How will the goods and services be produced? -Who will consume the goods and services? -What goods and services will be produced?

Select all of the strategies for avoiding credit problems.

-Set goals. -Create a budget and stick to it. -Run a credit report annually. -Use the debt-to-income ratio to determine if you are ready for a big purchase. -Pay bills on time. -Get rid of unnecessary expenses.

Two Wheel Bicycle Company increased its market share from 10 percent to 25 percent during one year. Select statements that could be true as a result of this increase.

-Two Wheel Bicycle increases its advertising budget. -Two Wheel Bicycle manufactures more bicycles. -Employees get a raise. -The owner opens another Two Wheel Bicycle store.

Select all the items that describe an entrepreneur.

-can invent new products -can start new businesses -can create jobs -takes on risks

Select all the strategies you can use to manage risks.

-have a warranty -have an emergency fund -buy health insurance -become informed

Select the items that describe voluntary exchanges.

-occurs between individuals and countries -bartering baseball cards -trading money for a car

Select each of the tools and services available with a savings account.

-online savings plan -ATMs -transfer money to other accounts -automatic transfer -online statement -direct deposit

Select the items that support the statement: Consumer preferences affect how producers make goods.

-purchasing products made from recycled materials -consuming food made in a fair trade way -buying organic products and non-GMO foods

The deadline to file your tax forms is _____.

April 15

Jillian has a low credit score, and she will not be able to pay the minimum balance on her credit card bill next month. What should Jillian do?

Find credit counseling services.

What would happen if you didn't file taxes?

The first time, the IRS would file for you and you'd owe more than you would have if you had filed yourself, plus penalties and interest.

Considering the case of the two health clinics above, why do you think that trouble was brewing?

The staff at the downtown clinic saw that their colleagues at the uptown clinic were treated better and had more opportunity.

Before you select a savings account, you want to think about how long you'll keep your money in the account.

True

The government uses the revenue from taxes to pay for goods and services for the community.

True

filing status

a category on tax forms that is closely tied to marital status; categories are: single, married, head of household, and widower

lien

a claim to take and hold property until a debt is paid

market share

a company's sales divided by the total sales in the industry over a certain period of time

W-4 form

a form prepared by an employee for the employer to specify exemptions and determine the amount of taxes to be withheld from the employee's paycheck

scam

a fraudulent scheme used to make money

bankruptcy

a legal statement that an individual is unable to pay lenders, involving a court process that protects people while they repay debts or the court removes the debts

beneficiary

a person who receives the payment from a life insurance policy

foreclosure

a process in which a lender tries to regain property because the borrower has not made payments

garnishment

a process when a lender tries to obtain money from an individual's employer to pay an unpaid debt

claim

a request for payment from an insurance company

money market account

a savings account that offers a higher rate of interest when you make large deposits

tax return form

a tax form that an individual completes to calculate how much is owed to or refunded by the IRS

W-2 form

a tax from that an employer sends to employees after the end of the year to list income and amount paid in taxes

The annual percentage yield (APY) is the _____.

amount of interest you'll earn in one year from a savings account

withholding allowances

an amount an individual enters on a W-4 form that helps an employer calculate the amount of income tax to subtract from an employee's paycheck

co-payment

an amount the insured person pays to cover a portion of a doctor bill or cost for prescription

value

an item's worth

Consumers influence how goods and services are made by _____.

choosing which goods and services to buy

variable interest rates

different interest rates paid for different size balances, with higher balances earning higher rates

Entrepreneurs and other sellers _______ when buyers purchase the product they sell at prices more than high enough to cover the costs of production.

earn profits

Factors that improve human capital and can increase labor productivity include choosing a career, training, and _____.

education

A market _____.

exists whenever buyers and sellers exchange goods and services

Ben wants to sell his used couch to Pam. Ben and Pam will trade the couch for money, if both individuals expect to _____.

gain

fad

goods and services that become popular very quickly and then lose their popularity very fast

The purpose of insurance is to _____.

help protect you from financial loss

labor

human resource that is used to produce goods and provide services

Gum and candy are often for sale right next to cash registers. This buying situation encourages consumers to use their money to make _____ purchases.

impulse

Both the satisfaction of creating new products and the possibility of earning money are _____ for an entrepreneur.

incentives

liability coverage

insurance that covers injury or loss to other people, for which injury or loss you are responsible

property coverage

insurance that covers the contents of your home, such as furniture, television, bikes, appliances, and clothing

The purpose of a W-4 form is to _____.

let your employer know how much to take out of your paycheck for taxes

Jim purchases land hoping that the value of the land will increase over the next five years. What risk does Jim face?

losing money in an investment

return

money earned on an investment

capital

money used for an economic purpose, such as investment

When people buy something, they value it ______ than it costs them. But, when people sell something, they value it ______ than the payment they receive.

more;less

An online savings account _____.

offers higher interest rates because they don't have the overhead that standard banks have

Life insurance _____.

pays a certain sum of money to a beneficiary in case of death

references

people who comment on a person's character and qualifications

competitor

person or group that rivals another

producer

person who makes goods and services

entrepreneur

person who organizes other productive resources to make goods and services

consumer

person whose economic wants are satisfied by using goods and services

market

place where buyers and sellers exchange goods and services

The interaction between buyers and sellers in the marketplace leads to goods and services being distributed by _____.

price

wage

price of labor, often given on an hourly, daily, or weekly basis

salary

price of labor, usually expressed on a yearly basis

If a lender is not paid and they take the collateral that secured the loan, this is called _____.

repossession

phishing

requesting confidential information over the internet under false pretenses to fraudulently obtain credit card numbers, passwords, or other personal data

A consumer uses goods and services to _____.

satisfy economic wants

dependent

someone who depends on another individual for food, shelter, and other necessities, usually a child

investment

something that people put their money into because they hope to make more money in the future

capacity

the ability to make payments based on amount of income and other bills

deductible

the amount a person has to pay when making an insurance claim, with the remaining cost covered by the insurance company

debt-to-income ratio

the amount of debt compared to income; a ratio used to determine if an individual has excessive debt

productivity

the amount of output that comes from a unit of input

premium

the amount paid by the policyholder for insurance

risk

the chance that things will turn out differently than expected

identity theft

the crime of stealing an individual's personal information in order to gain from that person's finances

interest thresholds

the minimum balances before the bank begins paying interest

bodily injury limit

the most the insurance company will pay

repossession

the seizing of the collateral or item that secured the loan when the debt has not been paid

demand

the willingness and ability of consumers to buy a good or service

barter

to exchange goods and services without the use of money

trade

to exchange goods and services, with or without the use of money

invent

to make a new product

exchange

to trade, or a market where buyers and sellers interact