Economics

Why do people have to make choices about how they spend money?

• Because money is unlimited

• Because wants are limited

• Because money and resources are limited

Why is it important to understand opportunity cost when making decisions?

• It helps you avoid saving

• It helps you know what you give up when choosing something else

• It tells you which stores have sales

How does scarcity affect decision-making in families?

• It allows everyone to get what they want

• It forces families to pick what’s most important

• It leads to more free goods

What might happen if a store advertises a product as 'limited time only'?

• It increases the incentive for consumers to buy it

• It decreases interest in the product

• It causes people to save more money

How can advertising change a consumer’s choice?

• It makes all products more expensive

• It informs or persuades people to buy something

• It teaches people how to start a business

If a child chooses to buy a toy instead of saving for a bike, what is the opportunity cost?

• The toy

• The money

• The bike

Why might a business choose to offer 'buy one, get one free'?

• To increase taxes

• To lower demand

• To give consumers an incentive to buy more

How does interest help people who keep money in a bank?

• It lowers their income

• It charges them extra fees

• It gives them a small reward for saving

If a person borrows money to buy a car, what must they do later?

• Sell the car to someone else

• Return the car

• Pay the money back, possibly with interest

Why might prices increase during a time of high inflation?

• Goods are more available

• There is too much supply

• There is more demand and money in circulation