Econ Unit 7: Personal Finance

Why do people reach different decisions using cost-benefit analysis?

• People use different types of currency.

• Different people live under different governments.

• Costs & benefits are subjective based on person's perspective

• Investment payoffs never turn out.

Which of the following most accurately described the costs and benefits of using a credit card?

• Credit cards are convenient but can result in debt.

• Credit cards charge low interest on high-cost items.

• Credit cards cost money to use but result in lower prices.

• Credit cards expand purchasing power but produce waste.

What do leases contain?

• utility bills

• the obligations of renters and landlords

• the interest payment on apartment-building mortgages

• insurance provided for replacement cost in case of loss

What statement describes one of the opportunity costs of attending college?

• Buying textbooks.

• Specializing limits a person's possible jobs.

• Money spent on tuition could've been invested in in a new car..

• College education is no guarantee of a high-paying job.

In which situation would disability insurance be useful?

• Your personal possessions are stolen from your apartment.

• You lose your job because of an injury or illness.

• You want to choose your own doctor or hospital.

• You cause a car accident that injures other people.

What kind of customer would want collision coverage included in his or her auto insurance?

• someone whose car has been stolen

• car has too little value, not worth repairing if in accident

• someone concerned about causing damage to his or her own car

• worried about an accident with someone who has no insurance

Which of these statements describes a situation in which people have to pay a deductible?

• Paying a certain cost before the insurance policy covers part of a medical expense

• Health insurance allows them to choose any doctor/hospital

• In an accident caused by someone who has no insurance

• Insurance covers actual value instead of replacement cost.

Which of these helps you avoid debt by keeping track of your expenses and income?

• health insurance

• a personal budget

• cost-benefit analysis

• a credit card

What is the first step in making a personal budget?

• Check interest rates on loans.

• Categorize different expenses.

• Add up all sources of income.

• Reduce expenses in flexible categories.

Which of these is an example of a fixed expense?

• gasoline

• clothing

• travel

• rent