Financial Lit Ch 1 Vocab

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Financial Lit Ch 1 Vocab - Quiz

Vocabulary test on basic economic terms such as needs, want, values, goals, supply, demand, etc.


Questions and Answers
  • 1. 

    Things that you would like to have but can live without

    • A.

      Resources

    • B.

      Needs

    • C.

      Wants

    • D.

      Goals

    Correct Answer
    C. Wants
    Explanation
    Wants are things that individuals desire or wish to have, but they are not necessary for survival or basic needs. While wants may enhance one's quality of life and provide enjoyment, they are not essential for one's existence. In contrast, needs are the basic necessities required for survival, such as food, water, shelter, and clothing. Goals, on the other hand, are specific objectives that individuals strive to achieve, which may or may not be related to their wants or needs. Resources, in this context, refer to the means or materials that can be used to fulfill wants, needs, or goals.

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  • 2. 

    Anyone who buys or uses products

    • A.

      People

    • B.

      Businesses

    • C.

      Government

    • D.

      Consumer

    Correct Answer
    D. Consumer
    Explanation
    The correct answer is "consumer" because the question is asking for the group of people who buy or use products. The term "consumer" refers to individuals who purchase goods or services for personal use. This includes everyday individuals who buy products for their own consumption, rather than businesses or government entities.

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  • 3. 

    A paid form of communication sent out by a business about its product or service

    • A.

      Puffery

    • B.

      Advertising

    • C.

      Production

    • D.

      Resources

    Correct Answer
    B. Advertising
    Explanation
    Advertising is a paid form of communication sent out by a business about its product or service. It is a marketing strategy used to promote and persuade potential customers to buy or engage with the advertised product or service. Advertising can take various forms such as television commercials, print advertisements, online banners, and social media posts. It plays a crucial role in creating brand awareness, increasing sales, and reaching a wider audience.

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  • 4. 

    A plan to reach long-term goals within a person's life is

    • A.

      Life span

    • B.

      Goals

    • C.

      Opportunity cost

    • D.

      Life-span plan

    Correct Answer
    D. Life-span plan
    Explanation
    A life-span plan refers to a strategic approach or roadmap designed to achieve long-term goals within an individual's life. It involves setting specific objectives, outlining the necessary steps, and allocating resources effectively to ensure progress towards these goals over a person's entire lifespan. This plan takes into account various factors such as personal aspirations, career development, financial stability, and personal growth. It helps individuals prioritize their actions, make informed decisions, and stay focused on their long-term objectives, ultimately leading to a more fulfilling and successful life.

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  • 5. 

    The quantity of a product that producers are willing and able to make available for sale at various prices over a given time period is demand.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The given statement is incorrect. The quantity of a product that producers are willing and able to make available for sale at various prices over a given time period is supply, not demand. Demand refers to the quantity of a product that consumers are willing and able to purchase at various prices.

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  • 6. 

    The quantity of a good or service that consumers are willing and able to buy at various prices during a given time period is supply.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is incorrect because the quantity of a good or service that consumers are willing and able to buy at various prices during a given time period is actually referred to as demand, not supply. Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at various prices during a given time period.

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  • 7. 

    Things you cannot live without are called ___________________________________.

    Correct Answer
    needs
    Explanation
    The term used to describe things that are essential for survival or important for one's well-being is "needs". These are the things that are necessary for an individual to live a healthy and fulfilling life. Without these needs being met, it would be difficult or impossible to sustain oneself.

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  • 8. 

    The things you want to accomplish in your life are called ____________________________.

    Correct Answer
    goals
    Explanation
    The word "goals" refers to the things that an individual wants to achieve or accomplish in their life. These can be personal, professional, or any other aspirations that one sets for themselves. Goals provide direction, motivation, and a sense of purpose in life. They help individuals to focus their efforts and make progress towards their desired outcomes.

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  • 9. 

    Something you hope to achieve within a year is called a ______________________________.

    Correct Answer
    short term goal
    Explanation
    A short term goal refers to something that an individual hopes to achieve within a relatively short period of time, typically within a year. It implies setting specific objectives or targets that can be accomplished in the near future, allowing individuals to track their progress and stay motivated. Short term goals are often stepping stones towards achieving larger, long-term aspirations, and they help individuals stay focused and organized in their pursuit of personal or professional growth.

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  • 10. 

    The study of the role consumers play in an economic system is called

    • A.

      Equilibrium price

    • B.

      Resources

    • C.

      Economics

    • D.

      Consumer economics

    Correct Answer
    D. Consumer economics
    Explanation
    Consumer economics is the study of the role consumers play in an economic system. It focuses on how individuals make decisions regarding the allocation of resources and the consumption of goods and services. Consumer economics examines factors such as consumer behavior, demand and supply, market structures, and the impact of government policies on consumer welfare. It helps understand how consumers' choices and actions influence the overall functioning of the economy.

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  • 11. 

    The price at which the quantity supplied exactly equals the quantity demanded of a product.

    • A.

      Equilibrium price

    • B.

      Resources

    • C.

      Economics

    • D.

      Consumer economics

    Correct Answer
    A. Equilibrium price
    Explanation
    The equilibrium price refers to the price at which the quantity supplied of a product matches the quantity demanded. This is the point where the market is in balance, with neither excess supply nor excess demand. At this price, buyers are willing to purchase exactly the same amount that sellers are willing to sell, resulting in a stable market condition. The equilibrium price is determined by the interaction of supply and demand forces in the market.

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  • 12. 

    The study of how we make use of our resources is called:

    • A.

      Consumer economics

    • B.

      Resources

    • C.

      Equalibrium price

    • D.

      Economics

    Correct Answer
    D. Economics
    Explanation
    Economics is the study of how individuals, businesses, and societies allocate their limited resources to satisfy their unlimited wants and needs. It involves analyzing and understanding how people make choices, produce goods and services, and distribute them among various individuals and groups. Economics encompasses various subfields, including consumer economics, which focuses on how individuals make decisions regarding their consumption and spending habits. Therefore, economics is the correct answer as it encompasses the study of resource allocation and utilization.

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  • 13. 

    The gradual increase in the earth's average temperature is called:

    • A.

      Resources

    • B.

      Economics

    • C.

      Global warming

    • D.

      Production

    Correct Answer
    C. Global warming
    Explanation
    Global warming refers to the gradual increase in the Earth's average temperature. It is caused by the accumulation of greenhouse gases in the atmosphere, primarily due to human activities such as burning fossil fuels and deforestation. These greenhouse gases trap heat from the sun, leading to a rise in temperature. The consequences of global warming include melting ice caps, rising sea levels, extreme weather events, and disruptions to ecosystems. Therefore, the term "global warming" accurately describes the phenomenon of the Earth's increasing average temperature.

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  • 14. 

    The time between a person's birth and death is called a life-span goal.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The given statement is incorrect. The time between a person's birth and death is not called a life-span goal. A life-span goal refers to a long-term objective or aspiration that a person aims to achieve throughout their entire life. The statement does not accurately define the term "life-span goal," making the answer false.

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  • 15. 

    Long-term goal that you want to reach during your life is called a long term goal.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
  • 16. 

    Something you hope to achieve over a period of years is called

    • A.

      Short-term goal

    • B.

      Life-span goal

    • C.

      Puffery

    • D.

      Long-term goal

    Correct Answer
    D. Long-term goal
    Explanation
    A long-term goal refers to something that an individual hopes to achieve over a period of years. Unlike short-term goals, which are typically accomplished within a shorter time frame, long-term goals require more time, planning, and dedication. These goals often involve significant milestones or achievements that may take years to accomplish, such as completing a degree, starting a family, or establishing a successful career. Long-term goals require consistent effort and perseverance, as they may require overcoming obstacles and making sacrifices along the way.

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  • 17. 

    The value of your next best alternative whenever you make a choice is called

    • A.

      Resources

    • B.

      Opportunity cost

    • C.

      Production

    • D.

      Profit

    Correct Answer
    B. Opportunity cost
    Explanation
    Opportunity cost refers to the value of the next best alternative that is forgone when making a choice. It represents the benefits or profits that could have been obtained from the alternative option that was not chosen. In other words, opportunity cost is the cost of choosing one option over another. It is an important concept in decision-making as it helps individuals and businesses evaluate the trade-offs and make efficient choices based on the potential benefits and sacrifices involved.

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  • 18. 

    The creation of goods and services is called production.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because production refers to the process of creating goods and services. It involves transforming inputs into outputs, which can be tangible products or intangible services. This can include activities such as manufacturing, farming, mining, and providing various services like healthcare or education. Overall, production is a fundamental economic activity that contributes to the growth and development of an economy.

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  • 19. 

    The difference between the money received from selling a product and the cost of producing that product is called

    • A.

      Equilibrium price

    • B.

      Puffery

    • C.

      Scarcity

    • D.

      Profit

    Correct Answer
    D. Profit
    Explanation
    Profit is the correct answer because it refers to the difference between the money received from selling a product and the cost of producing that product. Profit is a financial gain that businesses make when their revenue exceeds their expenses. It is an important measure of the success and profitability of a business.

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  • 20. 

    Innocent exaggerations used to sell products is called

    • A.

      Equilibrium price

    • B.

      Puffery

    • C.

      Scarcity

    • D.

      Profit

    Correct Answer
    B. Puffery
    Explanation
    Puffery refers to innocent exaggerations or promotional statements used to sell products. It is a common marketing technique where advertisers make extravagant claims about their products or services that are not meant to be taken literally. These statements are subjective and are not intended to deceive or mislead consumers but rather to create a positive image and generate interest in the product. Puffery is a legal practice in advertising as long as it does not make false or misleading claims about the product's attributes or benefits.

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  • 21. 

    A choice made in an organized, logical manner, so that it will most likely fulfill your need or want is a rational buying decision.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A rational buying decision refers to a choice that is made in a systematic and logical manner, based on careful consideration of one's needs and wants. This decision-making process involves evaluating different options, considering their pros and cons, and selecting the option that is most likely to fulfill the individual's needs or wants. Therefore, the statement that a rational buying decision is made in an organized and logical manner is true.

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  • 22. 

    The basic economic problem that consumers' wants are always greater than the resources available to satisfy those wants is called

    • A.

      Scarcity

    • B.

      Economics

    • C.

      Resources

    • D.

      Profit

    Correct Answer
    A. Scarcity
    Explanation
    Scarcity refers to the fundamental economic problem of limited resources relative to unlimited wants and needs. It means that there are not enough resources available to satisfy all the desires and demands of consumers. This concept highlights the necessity for individuals, businesses, and governments to make choices and prioritize their needs and wants due to the scarcity of resources. Scarcity is a key concept in economics as it drives decision-making, resource allocation, and the study of how societies manage and distribute their limited resources.

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  • 23. 

    All things used to create other goods or services is called

    • A.

      Scarcity

    • B.

      Economics

    • C.

      Resources

    • D.

      Profit

    Correct Answer
    C. Resources
    Explanation
    Resources refer to all the things used to create other goods or services. In economics, resources are the inputs required in the production process, such as land, labor, capital, and entrepreneurship. These resources are limited or scarce, which means they have alternative uses and must be allocated efficiently to satisfy unlimited human wants and needs. Therefore, resources play a crucial role in the production and distribution of goods and services in an economy.

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  • 24. 

    Something you hope to achieve within a year is called a goal.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
  • 25. 

    The standards you use to judge what is right and wrong, good and bad, important and unimportant for you are goals.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement suggests that the standards used to judge what is right and wrong, good and bad, important and unimportant are goals. However, this is incorrect. Goals are specific objectives or targets that one aims to achieve, while standards are principles or criteria used to evaluate something. Therefore, the correct answer is false.

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