Chapter 2 - Prioritize Purchases

Needs are things that are necessary for maintaining physical life.

• TRUE

• FALSE

Answer explanation

The statement is TRUE because needs refer to essential requirements for survival, such as food, water, and shelter, which are necessary for maintaining physical life.

As consumers, we spend according to our needs and wants.

• TRUE

• FALSE

Answer explanation

TRUE is correct because consumers make purchases based on their needs (essentials) and wants (desires), influencing their spending behavior.

An example of consumption is choosing between going out or staying home.

• TRUE

• FALSE

Answer explanation

The statement is FALSE because consumption refers to the use of goods and services, while the choice between going out or staying home is more about decision-making rather than consumption itself.

Opportunity cost is an economic concept representing the benefits you could have received by choosing the alternative.

• TRUE

• FALSE

Answer explanation

TRUE is correct because opportunity cost refers to the potential benefits lost when choosing one alternative over another, highlighting the value of the next best option not taken.

Economic resources include things like the money, land, material goods, and human knowledge and labor used to produce goods and services.

• TRUE

• FALSE

Answer explanation

The statement is TRUE because economic resources encompass money, land, material goods, and human knowledge and labor, all of which are essential for producing goods and services.

What is considered to be an economic resource?

• Production of goods and services

• Consumption of goods and services

• Distribution of goods and services

• All of these answers

Answer explanation

Economic resources encompass the production, consumption, and distribution of goods and services. Therefore, the correct answer is 'All of these answers' as they all represent aspects of economic resources.

What is one of the top things that teenagers spend money on?

• Home goods

• Clothes

• School

• None of the above

Answer explanation

Teenagers often prioritize fashion and self-expression, making clothes one of their top spending categories. This reflects their desire to fit in and showcase their individuality.

What is considered to be a want?

• Food

• Clothing

• Smartphone

• Relationships

Answer explanation

A want is something that is not essential for survival. While food, clothing, and relationships are basic needs, a smartphone is a luxury item that enhances convenience and connectivity, making it a want.

What influences a person's spending values?

• Culture

• Family

• Friends

• All of these choices

Answer explanation

A person's spending values are influenced by various factors, including culture, family, and friends. Each of these elements shapes attitudes and behaviors towards money, making 'All of these choices' the correct answer.

What is considered to be a need?

• Ice cream

• Movies

• Water

• Concert tickets

Answer explanation

A need is something essential for survival. Water is crucial for life, while ice cream, movies, and concert tickets are luxuries or wants that enhance enjoyment but are not necessary for basic survival.