Budgeting Quiz

All of the following may be considered needs EXCEPT ___.

• bus fare

• groceries

• movie ticket

• rent

What is opportunity cost?

• the tax that is paid on income

• the fees that are paid for education

• the value of an alternative you give up

• the interest paid on a long-term investment

Rent and car insurance payments are both which type of expenses?

• fixed costs that are needs

• fixed costs that are wants

• variable costs that are needs

• variable costs that are wants

A consumer is someone who ___.

• makes something

• buys something

• offers a service

• sells a product

Which statement about variable expenses is true?

• Variable expenses include only large costly items.

• Variable expenses should not be included in the budget.

• Variable expenses include wants but not needs.

• Variable expenses are easier to cut than fixed expenses.

What is the main purpose of a budget?

• to keep track of cash flow

• to find new sources of income

• to differentiate between wants and needs

• to determine the amount of taxes to be paid

Ellis's budget shows a problem. His weekly expenses average $10 more than his earnings. He works 5 days a week and every day on his way to work, he spends $2.50 on hot chocolate. Will cutting out the hot chocolate help Ellis balance his budget?

• Yes, and he will have some money left over.

• Yes, the amount he saves will balance his budget exactly.

• No, Ellis will have to find other places to cut.

• Ellis should keep buying the hot chocolate and forget about his budget.

Susie wants to buy a new dishwasher that costs $500. She has already saved $100. She earns $1,200 a month and her total expenses come to $1,000. She is going to put all of her extra money each month into her savings account for the dishwasher. Assuming her expenses stay the same, how long will it take Susie to save enough money for the dishwasher?

• 1 month

• 2 months

• 3 months

• 4 moths

Bob is saving for a vacation. He earns $960.00 each month from his job at a fast food restaurant and made an extra $48.00 this month mowing yards. If his monthly expenses are $880.00, how much can he put in his vacation savings account this month?

• $32

• $48

• $112

• $128