microeconomics final exam
According to a 2019 One Poll study, approximately how much does the average adult spend per month on non-essential items?
$1,500
According to AAA, what is the total operating cost for a new midsize sedan driven 15,000 miles per year?
$24 per day
Jared has health insurance through his employer, which he has never considered using until now. The plan has a $1,000 annual deductible and 20% co-pay for office visits with a minimum of $25. Jared cut his foot and went to his doctor's office where he got stitches. The bill from the doctor's office was $240. How much of the bill will Jared have to pay himself?
$240
Which would be most beneficial for most tax filers?
$500 credit
According to many financial planners, what is the most you should spend on rent?
30% of gross income
Who would be most likely to benefit from a prescription drug program as part of their health insurance?
A person who has a condition that requires taking medication every day.
Which best describes why people purchase insurance?
A way to manage risk that occurs as part of daily life.
What is the first step to take if dissatisfied with a good or service you purchased?
Contact the seller and try to resolve the problem.
What is the first step you should take if unable to make bill payments on time?
Contact your creditors to request an extension.
Michael is looking for a college rental. He finds a really nice house for rent close to campus that is less than half that of other comparable listings. When he calls, he is told that because it is such a good deal, he must first email an application and wire the security deposit in order to see the property. If he doesn't like it, he is told he can get a refund. What should he do?
Find another listing, this one is most likely a scam.
Which is true about the cost of attending a four-year college or university?
It has been rising faster than the rate of inflation.
Which is true about purchasing a vehicle?
It is easy to purchase a vehicle you really can't afford.
Which is true of private disability insurance?
It is in addition to any government provided disability benefits.
If a specific product has a longer parts and labor warranty than other competitive products, which is most likely to be true?
It is likely to be of higher quality.
Which is true of homeowners insurance?
It is required by the lender if there is a mortgage on the house.
Which is true about purchasing a product from an on-line seller?
It is very convenient.
Which is true when it comes to using your Social Security number?
It should not be printed on checks or used as a username.
Jason is shopping for a new car. He completes new credit applications at four different dealerships. Will this affect his credit score?
It will negatively affect his score.
What is the effect of a $3,000 adjustment to a filer's income?
It will reduce the filer's taxable income by $3,000.
On what date would a person no longer be automatically eligible to stay on their parent's health insurance plan, regardless of marital, education or dependent status?
January 1 the year after they turn 26
Which of the following individuals could take advantage of COBRA?
Jeanie no longer works for her employer but wants to continue her insurance.
Which would be covered by the liability portion of your insurance policy?
You go off the road while driving your car and damage a fence.
Which public record would be part of a credit report?
bankruptcy filing
Which is an advantage many sedans have over pickup trucks and crossovers?
better fuel economy
Which type of insurance is not included in a typical renters policy?
building and other structures
Which on-time payment will actually improve your credit score?
car loan
You are driving down the highway and hit a deer with your car. What type of insurance would pay for repairs to your vehicle?
comprehensive
Which type of mortgage has a payment that remains the same until it is paid off?
conventional
Which method of purchase will offer the buyer the greatest protection if there is a problem?
credit card
Which is not considered when determining your credit score?
current annual income
Which is an optional fee many dealers charge on a new vehicle sale?
document fee
Which is not one of the four pieces of information required for an identity thief to steal your identity?
driver's license number
Which is an advantage of purchasing a late model used vehicle instead of a comparable new vehicle?
lower initial cost
If planning to eventually transfer from one school to another the most important consideration is
making sure credits earned will transfer.
Which is typically the least expensive type of living unit to purchase?
manufactured home
Which of the following is not considered taxable income by the IRS?
most gifts
What is the payment that you make to pay for insurance called?
premium
Leases typically contain all of the following except
price if the tenant wishes to purchase the property.
Which tax do local governments rely on the most?
property tax
What is the main reason governments levy taxes?
raise revenue
Which of the following high growth occupations pays the most?
registered nurse
The less someone makes, the higher the percentage of income they pay in taxes is a
regressive tax.
What coverage would a 20 year-old full-time college student typically need to purchase, even if they are still listed on their parent's insurance policies?
renters insurance if living off-campus
Jonah purchases a new flat screen television and declines the extended service plan. What risk management strategy is he employing?
risk assumption
Insurance is based on the concept of
risk pooling.
How long before a negative account report is removed from your credit history?
seven years
Which is a common characteristic of outlet stores?
single brand of merchandise
Which is the most popular type of home?
single-family dwelling
All of the following are reasons that a mortgage application could be rejected except
the applicant previously had a mortgage.
What is the relationship between the insurance deductible and premium?
the higher the deductible the lower the premium.
What is the minimum warranty coverage for new vehicles sold in the United States?
three years/36,000 miles
Which auto insurance coverage is not needed if your vehicle is still under the factory warranty?
towing and emergency road service
What is not a necessary step to take after using a public computer to transmit personal or financial information?
turn the computer off
It is better to buy a vehicle then lease it, if the customer
wants to keep the vehicle for a long time.
What type of insurance combines life insurance with a savings account?
whole life insurance
Uninsured and underinsured motorist protection provides coverage for
you are in an accident with someone who doesn't have insurance.
Lauren rents an apartment for $1,000 per month. How much equity will she have built up after living there for two years?
$0
Which is the standard form individuals use to file their federal income tax?
1040
When obtaining a mortgage, what is typically the minimum down payment required to avoid having to purchase private mortgage insurance?
20%
How old are most Medicare recipients?
65 and older
Who would be a good candidate for a high deductible health plan?
A 27 year old man with no history of health problems.
Which is an example of a vishing scheme?
A caller informs you of suspicious credit card activity and asks to confirm your identity.
What is Workers' Compensation?
A government program that helps workers who suffer a disabling injury on the job.
What is true of purchasing insurance through a local agent instead of an online website?
A local agent can help you deal with a complicated claim.
Which is a sign that identity theft has taken place?
An account statement billing you for items you didn't purchase.
Which is the best definition of credit?
An agreement to receive goods or services now and pay at a later date.
When should a consumer file a fraud alert with the credit bureaus?
Any time they suspect they have been a victim of identity theft.
Which is the best way for a college student to start building their credit score?
Apply for a credit card, use it to make small purchases and pay the full balance each month.
Aidan needs a four-year degree to become a teacher but wants to save as much money as possible. Which would be his best strategy?
Attend a community college for two years and then transfer to a four year college or university.
How are Health Care Flexible Spending Accounts (HCFSA) and Health Savings Accounts (HSAs) similar?
Both allow the plan owner to pay expenses with pre-tax dollars.
Which is an effective strategy for reducing insurance costs?
Bundle different policies with a single insurer.
Which is a recommended procedure to safeguard personal information?
Change passwords of important accounts frequently.
You notice that your credit card bill has not been arriving as usual. You log into your account and notice your account address has been changed. You thoroughly review your statement but find no unusual activity. What is your best course of action
Change the address back, cancel your existing card and request a new one.
Which is a good step to take to secure your home internet connection?
Change the default router password to something unique and complex.
You are reviewing your credit card account on-line and notice charges you did not make. Besides contacting the credit card company what else should you do?
Change your login and PIN for this and all other financial accounts.
What is the difference between community colleges and four year colleges and universities?
Community college students are more likely to attend part-time.
Which is a drawback of attending a community college instead of a four year college?
Community colleges offer less of a campus atmosphere.
Which best describes the main role of the three major credit reporting agencies?
Compile consumer credit and loan information and provide it to lenders and businesses.
Which is an advantage of buying a used vehicle from a dealer instead of a private seller?
Dealers are often required to disclose any mechanical problems a vehicle has.
If planning to enter the workforce directly after high school what should be your most important consideration?
Does the work fit into your long-term career goals?
If offered an extended service contract for a small purchase, which is usually the best thing to do?
Don't purchase it and try to use a credit card that extends the warranty.
What would a FICO score of 810 be considered?
Excellent
Which is an example of negligence?
Failing to stop at a stop sign causing an accident.
Felicia has moved to a city with a high cost of housing, where apartments rent for 50% more than what she has budgeted. Which is likely to be her best option?
Find a roommate to share housing costs.
Why does group health insurance often have lower premiums than individuals purchasing the same insurance on their own?
Groups benefit from their ability to negotiate the purchase of multiple policies.
Which is a common tradeoff for getting the latest phone for free or at a significant discount?
Having to sign up for a multi-year service plan.
What is depreciation?
How much value a vehicle loses over time.
What important information does a Form W-2 provide?
How much was withheld from your pay for taxes.
Which best explains what a full warranty covers?
If a product fails due to a manufacturing defect it will be repaired or replaced.
What is the likely result of using an out-of-network provider for routine health services?
Insurance may not pay for the cost of the services provided.
What is the purpose of a power of attorney?
It authorizes someone to make legal and financial decisions if you are unable to.
Which is a typical return policy for something that you purchased from an internet seller, did not use, but decided later you didn't want?
It can be returned but you'll have to pay for the return shipping.
Which is true about the open enrollment process for health insurance?
It typically takes place for only a three or four week period.
How does credit utilization affect your credit score?
Keeping credit utilization below 30% increases your score.
How does a vehicle's depreciation affect the cost of leasing a vehicle?
Lower depreciation decreases the cost.
Tyler has a valuable collection of sports cards. Would it be covered by his regular homeowners insurance?
No, unless he purchases an additional policy or rider.
Why is estate planning necessary to consider as you graduate from high school?
Once you become a legal adult your parents can no longer make legal decisions for you.
A buyer and seller reach an agreement on the sale of a home, and both sign the purchase agreement. Which would allow the buyer to withdraw from the agreement without losing their earnest money deposit?
One of the contingencies in the agreement is not met.
Which is a financial drawback of home ownership compared to renting?
Owners are responsible for the additional costs of taxes, insurance, and maintenance.
What type of identity theft does "phishing" refer to?
Posing as a credit card company or bank to steal your identity.
What is the difference between private and public vocational and technical schools?
Private schools cost significantly more.
What is a good way to document your household belongings for insurance purposes?
Record a video walk through and save the file to cloud storage or email it to yourself.
Which is an advantage of filing a federal tax return?
Refundable tax credits can only be received by filing.
Which is a lifestyle drawback to renting versus buying?
Renters follow more rules regulating what they can and cannot do.
How are financial services websites offering an additional level of security at login?
Sending a security code to the account holder's cell phone that must be used at log-in.
Monica is interested in early childhood education. She decides to spend the summer as a volunteer at a non-profit that provides childcare for young children. Which would not be a potential benefit of her volunteering?
She will be earning money she can apply towards college.
Which would be the best example of the benefits received principle of tax fairness?
Tax on gasoline used to pay for roads.
Which best explains the concept of out-of-pocket maximum in health insurance?
The amount the insured pays after which insurance covers 100% of all costs.
What is an insurance deductible?
The amount the insured pays before the insurer pays.
Which best describes the relationship between the effective income tax rate and the bracket rate?
The effective tax rate will always be lower than the bracket rate.
Which is usually true of employer sponsored health insurance plans?
The employee is expected to pay for part of the insurance premium.
Which is true of Social Security and Medicare taxes?
The employer matches the amount the employee pays to the government.
Which is a drawback to declaring bankruptcy?
The filing stays on your credit report for ten years.
How does your credit score affect your vehicle insurance in most states?
The higher your credit score, the lower your insurance premium.
What is the significance of the debt-to-income ratio (DTI)?
The lower your DTI the better when applying for a loan.
Which is true about the privacy policies users must agree to before using a website?
The majority of people do not read them before agreeing to them.
Which is generally true about the cost of vehicle insurance?
The more expensive the vehicle the more it costs to insure.
What would be the most likely difference between loans offered to someone with a good credit score versus a loan offered to someone with an excellent score?
The person with good credit will pay a higher interest rate than the person with excellent credit.
Kira is 22 years old and a senior in college. Her mother has a job that provides health insurance for the family. What criteria must be met in order for her to stay on her mother's policy next year?
The policy must still be in effect.
What is true when it comes to unit pricing of products?
The unit price is usually posted on the store shelf beneath the product.
Which is an advantage of leasing a vehicle instead of buying it?
The vehicle may be under warranty for the entire duration of the lease.
Which is a benefit to purchasing a vehicle from a private seller?
There are no hidden charges or fees.
Which is an advantage of purchasing a plan through the Health Insurance Marketplace?
There are usually many options, and it is easy to compare policies.
Which is true about filing a fraud alert with the credit bureaus?
There is no charge for filing a fraud alert or a credit freeze.
How is it that the states that impose the same percent tax on income, no matter the amount, still end up having a progressive income tax?
They allow for some form of deduction or exemption of income.
Which is not true of all condominiums?
They are buildings of four or more stories.
Which is true about long-term capital gains and income taxes?
They are taxed at a lower rate than earned income.
Why do websites track your online activity?
They can use the information to send you targeted ads.
What is the difference between vocational and technical schools and community colleges?
They do not offer clubs, sports, or other activities community colleges offer.
Which is the best conclusion you can draw about a person who received a large income tax refund?
They had more withheld from their pay than they owed in taxes.
Which is true of self-employed individuals?
They must pay an additional 15.3% self-employment tax.
Which is true of big box retailers?
They offer a wide variety of products.
What is the main purpose of an appraisal in the home sale process?
To determine if the property qualifies for a loan.
Which is the most practical way of protecting yourself against identity theft from a lost or stolen cell phone?
Use a complex password or other login security and do not save account passwords.
What should you do if you are constantly forgetting log-ins and passwords for important accounts?
Use a reputable company that provides password management services.
Which is not one of the three major credit reporting agencies?
Wells Fargo
Rodrigo uses his laptop every day for work. What is the most important consideration when shopping for a new one?
What is the warranty and how does he obtain service?
Why is it sometimes difficult to determine your best career option?
What you do in a job is usually different from studying the subject in school.
What is the opportunity cost of purchasing a new video game console?
What you would purchase with the money instead.
How is leasing a vehicle different from purchasing a vehicle?
With leasing you are renting the vehicle not buying it.
Why is it important to know about any custodial accounts that have been set up for you?
You are legally responsible for any tax liability they are creating.
Why is it important to have health insurance?
You are open to significant financial risk without it.
How is a security breach at a large company most likely to affect your personal data security?
You are vulnerable to identity theft if any of your information was stored in their system.
Which is a drawback to purchasing a vehicle from a private seller?
You have little or no recourse if the vehicle has problems.
Which is a minimum requirement to be accepted into the military?
You must have a high school diploma or GED.
Which is a financial advantage of renting versus buying?
You need less money upfront to move-in.
Which is true of military service?
You receive an excellent benefit package including a housing allowance.
What is the biggest advantage of working directly after high school instead of continuing your education?
You will be earning money rather than spending money.
Which is a benefit to declaring bankruptcy?
You will get out of the legal obligation to repay most of your debts.
Why is it important to build a good credit score before shopping for a house?
You will need a good credit score in order to obtain a mortgage.
Which is the best source of information on the ownership and maintenance history of a specific used vehicle you are looking at?
a Carfax or AutoCheck report for that vehicle
Who is usually your best resource to assist during the home purchase process?
a real estate agent
Which is a need?
a safe place to live
When can you find the lowest prices on seasonal merchandise?
after the season
A job-training program where an employer or other sponsor pays you to work in and learn about an occupation is known as
an apprenticeship.
Which type of housing is always a rental?
apartment
Which is not one of the "5 Cs of Credit?
consumer
Emma is graduating from high school and planning for her future. She really didn't like high school that much except for her classes in food preparation. She is very creative, likes to bend the rules, and enjoys cooking. Her goal is to someday be a chef in a large restaurant. What would be the best option for her to achieve her career goal?
enroll in vocational school
What tax can be levied on a person's assets after they die?
estate tax
Which would be an example of a tax designed to influence behavior?
excise tax on cigarettes
Ryan is considering purchasing a used five year old hatchback with 75,000 miles on it for $13,000. His main use would be commuting 20 miles to work each day. Which should he be most concerned about?
factory warranty has expired
Which usually does not have excise taxes levied on it?
food
According to the Federal Trade Commission which is the most common type of identity theft?
government documents or benefits fraud
Which of the following does not use consumer credit scores as part of their process?
graduate school admission officers
Which is not a factor that insurers typically consider when determining how much to charge for life insurance?
income
What is the largest source of federal revenue?
individual income taxes
Which is a characteristic of a website you can trust for accurate and reliable information about a product you are considering purchasing?
is an actual publication with editors
What is a common benefit of purchasing a good or service from a specialty retailer?
knowledgeable salespeople
Which best describes liability?
legal responsibility
What type of insurance would cover the medical bills of a pedestrian you accidentally hit while driving your vehicle?
liability
Which is an advantage of purchasing a new vehicle instead of a comparable older used vehicle?
longer warranty
Which is a responsibility that comes with renting?
paying rent for the duration of the lease
Which makes up the largest percentage of your FICO score?
payment history
Which are the top-selling vehicles in the United States?
pickup trucks
Leasing a vehicle is most likely to be better than buying for someone who
plans to get a new vehicle every two or three years.
You had an oil change done at a local shop. They made a mistake and caused engine damage that will cost $1,200 to repair. They are unwilling to pay for your repair. What is the best option to make them pay your repair bill?
small claims court
Jasmine is interested in purchasing a quality bicycle to commute to college and work. She doesn't know much about bikes but wants a good one that will last a long time. She also wants to be sure she can get it serviced where she purchased it. What would be her best option?
specialty retailer
Which type of debt is usually not erased by a bankruptcy filing?
student loan
Which would not qualify an individual to use a special enrollment period to sign up for health insurance?
sustaining a serious injury
You believe your identity and credit card information has been stolen when trying to purchase goods through a website you now believe was fake. Besides your credit card company, who else should you report the theft to?
the Federal Trade Commission www.IdentityTheft.gov
