Personal Finance Quiz_MT2

What is an opportunity cost in decision-making?

• The amount spent on a purchase

• The interest earned on investments

• The next best alternative given up when making a choice

• The cost of a product before taxes

Which of the following best illustrates an opportunity cost?

• Saving money in a bank account

• Missing a part-time job to attend a concert

• Earning a high salary in a job you dislike

• Buying a cheaper brand of product

How does marginal utility influence decision-making?

• It increases the overall cost of decisions

• It helps determine the additional satisfaction from consuming one more unit

• It focuses solely on the price of a product

• It eliminates the need for comparing alternatives

When does the law of diminishing marginal utility apply?

• When total satisfaction decreases with more consumption

• When satisfaction increases with every additional unit consumed

• When costs are reduced through bulk purchases

• When opportunity costs are high

If a person is considering investing in a 5-year bond instead of a savings account, what factor most affects their decision?

• Marginal utility

• Opportunity cost

• Time value of money

• Tax planning

What does the concept of the time value of money imply?

• Money loses its value over time due to inflation

• Money received today is worth more than money received in the future

• The cost of goods remains constant over time

• The government regulates money value

If you receive ₱5,000 today or ₱5,000 in one year, why is receiving it today preferable?

• You can invest it and earn interest

• The money will be taxed less today

• It will be worth the same in one year

• Inflation does not affect future money

What is the main reason for using the time value of money when planning savings?

• To maximize spending power in the present

• To understand how money grows over time

• To avoid spending money unnecessarily

• To minimize tax payments

If the annual interest rate is 8%, how much will ₱1,000 grow to in 1 year?

• ₱80

• ₱920

• ₱1,080

• ₱1,800

Why is saving money early important based on the time value of money?

• It helps avoid opportunity costs

• Money has less utility in the future

• Early savings grow due to compound interest

• Tax rates are lower for early savers