Finance Quiz 12

A problem on a drilling platform in the Gulf of Mexico has affected the amount of oil that is extracted and refined in the region. Because it is the summer travel season, the demand for gasoline is increasing; however, there is less gasoline available, and the prices for gasoline spike. What economic condition does this situation best describe?

• Scarcity

• Conservation

• Opportunity cost

• Input maximization

A business that decides to lease its current building instead of buying it is transferring risk through

• Insurance

• Contractual agreement

• Avoidance

• Partnership

When Matthew receives a check four times a year for income he has earned on his stock investments, he is receiving

• Cash

• Credit

• Deposits

• Dividends

Which of the following exemplifies the time value of money:

• Matthew decided to purchase a smartphone from TeleTech.com for $199.00, which used to be $220.00

• Rachel placed $250 in a savings account and accumulated $12.50 in interest

• Sophie estimated that she uses 78% of her income to pay her bills

• Harrison paid the government $1,508 in property taxes last year and estimates he will pay an additional 4% this year

Jorge is considering whether to invest $100 at his bank, but first, he wants to know what his $100 will be worth in a year. To figure this out, Jorge needs to know the

• time value of money.

• money orders.

• interest.

• credit.

Ali is borrowing $275,000 from a bank. So that Ali understands the terms of the loan, the bank outlines the terms in a formal agreement and requires Ali to sign it. This is an example of a financial

• contract.

• warranty.

• proposal.

• referral.

Martin keeps money in a special savings account to cover his living expenses for three months in case he loses his job or gets sick and can't work. Martin has set up a(n)

• retirement account.

• education plan.

• emergency fund.

• insurance policy.

Emily has decided to use all of her savings to buy a new car instead of a used one. What are the opportunity costs of that decision?

• The money she saves by not having to constantly repair a used car

• The reliability and luxury of a new car compared to a used one

• The benefits she could have received by using the additional cost of a new car another way

• The benefits she could have received by using public transportation instead

For a school project, Megan needs to calculate her net worth. Using the following information, help Megan determine her net worth. Car value = $6,000, Savings account = $250, Credit card debt = $500, Computer value = $100.

• -$5,850

• $5,650

• $5,850

• $5,150

Which of the following is an example of a payroll deduction:

• Health insurance

• Overtime hours

• Pay rate

• Gross pay