Unit 7 Test Flashcards
Why do economic decisions vary from person to person even under the same circumstances?
Costs and benefits are subjective.
Which of these statements most accurately describes the costs and benefits of using a credit card?
Credit cards are convenient but can result in debt.
Which of these statements describes one of the opportunity costs of attending college?
Time spent on schoolwork takes away from the chance to earn money at a job.
What do leases contain?
the obligations of renters and landlords
In which situation would fee-for-service insurance be useful?
You want to choose your own doctor or hospital.
When is liability insurance needed?
when you cause an accident that damages another vehicle or hurts someone
Which of these statements describes a situation in which people have to pay a deductible?
Their insurance policy only covers part of a medical expense.
What is a bank customer’s share of the profits made on loans?
savings account interest
What makes a checking account more convenient than a savings account?
You can spend your money without having to withdraw cash first.
With which type of account is a minimum balance fee associated?
checking account
What is the main reason to use a personal budget?
to stay out of debt
Which is the first step in making a personal budget?
Add up all sources of income.
Which of these is an example of discretionary spending?
vacation
What are you paying for when you lease a car?
the decrease in the car’s value
What does an amortization table show?
the principle and interest being paid on a loan
What makes a credit card more convenient than a debit card?
It can be used to buy things without immediate payment.
What does a good credit history do for consumers?
It makes it easier for them to get loans.
What kind of a credit card can customers with a bad credit history get?
one that’s secured by collateral
What is the annual percentage rate (APR) on a credit card?
the amount of interest charged on unpaid balances
Which of these protects customers who purchase defective products?
a warranty
What’s the difference between a brand-name and a generic product?
the company that sells the product
What is one of the primary concerns of socially responsible consumers?
sustainability
Why might a letter-writing campaign get a company to change its business practices?
The company might fear that the letter-writing campaign will become a boycott if it doesn’t respond.
Which would cause a boycott to fail?
Most consumers didn’t stay away from the company.
How can consumers get the government to pass laws preventing companies from engaging in offensive behaviors?
by lobbying
