W!SE Consumer Skills: Introduction, Borrowing & Autos

In economics, demand is...

• The amount ordered by a customer

• the amount buyers are willing and able to buy

• An advertising term

Answer explanation

Demand:

The amount of a good or service that buyers are willing and able to buy at all possible prices during a period.

As demand rises, prices most likely will rise.

Businesses will produce what customers demand. This is called...

• Consumer Demand

• Consumer

  Choice

• Consumer Sovereignty

A reward or benefit that motivates people to do something is called....

• An incentive

• A prize

• An advantage

The supply and demand for a product determines its...

• Popularity

• Price

• Production

Answer explanation

Price is dependent on the interaction between demand and supply components of a market.

Demand and supply represent the willingness of consumers and producers to engage in buying and selling. An exchange of a product takes place when buyers and sellers can agree upon a price.

Revenue ($ Taken In) - Costs ($ Spent) = ________

• Profit

• Balance

• Total

Answer explanation

Profit:

Income received for entrepreneurial skills and risk taking, calculated by subtracting all a firm's costs ($ spent) from its total revenues ($ taken in).

Consumer credit would be used for all of the following but...

• Buying groceries

• Buying a home

• Buying clothes

• Buying a vacation

Answer explanation

Consumer Credit:

The use of credit to facilitate consumer purchases for goods and/or services.

The use of money for consumption, not investment.

Being a smart comsumer involves...

• Being organized with paperwork

• Managing money effectively

• Researching products and services

• Checking statements and receipts for accuracy

• All are correct

An example to closed-end credit would be

• A credit card

• A charge card

• A mortgage

• A debit card

Answer explanation

Closed-end credit are one-time loans that the borrower pays back within a specified period and in payments of equal amounts.

Includes:

i. Installment Loans: Direct loan of a fixed amount of money for personal purposes, home improvement, or vacation expenses that will be paid back in installments over a period of time. (Mortgage)

ii. Single Lump-Sum Credit:

A loan that must be repaid in total on a specified day, often used to purchase a single item.

Unsecured loans don't have...

• Collateral

• Good Interest Rates

• Installment Payments

Answer explanation

Unsecured Loans:

Refers to any type of debt or general obligation that is not protected by any guarantee or collateral. These loans are instead based on credit worthiness.

Ex: Personal loans, Student loans and Credit Cards

If you co-sign on a loan, the lender can

decide to come after just you to collect

the money upon default.

• True

• False

Answer explanation

Cosigning:

a. When you co-sign a loan, you agree to be responsible for loan payments if the other party fails to make them.

b. You stand in the co-signer's shoes. The creditor can choose to just come after you-using all collection methods and affecting your credit.