Unit 7: Economics-Businesses & Individuals

A student must decide between going to the movies with friends or staying home and studying

for a final exam. She chooses to stay home and study.

Which economic term describes going to the movies in this scenario?

• Equilibrium price

• Law of demand

• Specialization

• Opportunity cost

Limited resources make it impossible for citizens to have everything they want and need. What does this basic economic fact force citizens to do?

• Save money by cutting their spending on goods and services

• Refuse to pay federal and state taxes

• Conserve resources to enable the manufacture of more goods

• Make choices among the goods and services currently on the market

Aimee’s Favorite Breakfast Restaurants:

1. Waffle Mansion

2. International House of Omelets

3. Bagels-R-Us

4. Mother Goose Donut

Aimee’s friends are taking her out to breakfast for her birthday. They gave her four options, which she ranked from her favorite to least favorite. What is Aimee’s opportunity cost for choosing to go to Waffle Mansion?

• Breakfast at International House of Omelets

• Breakfast at Bagels-R-Us

• Lunch at Waffle Mansion

• Lunch at Mother Goose Donuts

An opportunity cost is—

• The selection of an item or action from a set of possible alternatives

• The second-best alternative when an economic choice is made

• Something that never needs to be considered when making a choice

• Something that is rarely considered when evaluating career choices

Cecelia is a senior in high school. She is making choices about whether she will attend a 2-year college or go immediately into the workforce when she graduates. Which question should Cecelia ask herself when making this choice?

• Should I pay for college in cash or take out a loan?

• Should I buy a new laptop or a new desktop?

• How much will a degree increase my paycheck?

• Does Sam’s Salon or Bebe’s Beauty Parlor pay more?

Which is the best example of the store of value advantage of money?

• Gary obtains a loan to buy a sofa.

• Lynelle always uses cash to buy her clothes.

• James knows the price of a pair of shoes from the price tag.

• Roberto saves ten percent of his income in a retirement account.

What do the two items pictured above have in common?

• They allow people to access money that has been deposited in a bank account.

• They allow people to purchase items on credit.

• They allow banks to charge interest on money that is being borrowed.

• They keep the value of U.S. currency stable.

Based on the graph, when opening a new store, businesses should -

• invest in card-reader technology.

• stop using cash registers.

• require payment by check.

• train cashiers to count change quickly.

Which of the following best completes the diagram?

• Checks and debit cards

• Banks and credit unions

• Insurance Agencies

• Households and businesses

When a person makes a deposit, they are—

• Giving someone else money that they will have to pay back

• Using money as a measure of value to compare goods and services

• Accepting coins and currency in exchange for goods and services

• Placing money into their account at a bank or credit union