Podcast
Questions and Answers
Which scenario best illustrates the concept of opportunity cost?
Which scenario best illustrates the concept of opportunity cost?
- Purchasing a new smartphone on credit, increasing monthly expenses but gaining access to new features.
- Deciding to study for an exam instead of going to a concert, recognizing the potential for a better grade. (correct)
- Choosing to buy a used car instead of a new car, saving money on the purchase price.
- Investing in the stock market and earning a higher return than a savings account.
How do 'needs' and 'wants' relate to the economic principle of scarcity?
How do 'needs' and 'wants' relate to the economic principle of scarcity?
- Needs and wants are equally affected by scarcity, leading to efficient resource allocation.
- Scarcity only affects needs, as wants can always be satisfied.
- Needs are unlimited, while wants are limited by available resources.
- Scarcity forces individuals and societies to prioritize which needs and wants can be satisfied with limited resources. (correct)
An individual's monthly budget shows a deficit. What does this indicate about their financial situation?
An individual's monthly budget shows a deficit. What does this indicate about their financial situation?
- Their revenue is greater than their outlays, leading to savings.
- They have a surplus, indicating financial stability.
- Their outlays are greater than their revenue, leading to increased debt or reduced savings. (correct)
- Their revenue is equal to their outlays.
What is the primary difference between discretionary and non-discretionary spending?
What is the primary difference between discretionary and non-discretionary spending?
Which of the following actions would directly result in increasing a personal budget's surplus?
Which of the following actions would directly result in increasing a personal budget's surplus?
An unexpected car repair is best classified as what type of expense?
An unexpected car repair is best classified as what type of expense?
How does creating a budget contribute to effective financial management?
How does creating a budget contribute to effective financial management?
Which scenario exemplifies how charitable giving impacts an individual's or organization's financial situation?
Which scenario exemplifies how charitable giving impacts an individual's or organization's financial situation?
If a person has limited resources to buy food, which is a need, but wants a new phone, how can they apply the concept of scarcity?
If a person has limited resources to buy food, which is a need, but wants a new phone, how can they apply the concept of scarcity?
What is the relationship between scarcity and budget?
What is the relationship between scarcity and budget?
Flashcards
Budget
Budget
A spending plan and a list of spendable funds.
Charitable Giving
Charitable Giving
Providing a gift in money or goods to a public or private nonprofit organization.
Deficit
Deficit
The insufficiency of revenues relative to outlays; the opposite of a surplus.
Discretionary Spending
Discretionary Spending
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Needs
Needs
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Nondiscretionary Spending
Nondiscretionary Spending
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Occasional or Periodic Expense
Occasional or Periodic Expense
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Opportunity Cost
Opportunity Cost
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Scarcity
Scarcity
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Surplus
Surplus
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Wants
Wants
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Study Notes
Budget
- This is a spending plan with a list of spendable funds
Charitable Giving
- A gift in the form of money or goods to a public or private non-profit.
Deficit
- The insufficiency of revenues relative to outlays.
- The opposite of a surplus.
Discretionary Spending
- Implies the buyer has a choice.
- Examples include purchasing clothing or delaying a purchase.
- See also nondiscretionary spending.
Needs
- Goods and services needed to survive
- Examples include food, clothing and shelter.
Non-discretionary Spending
- Expenses that one does not have control over.
- Examples include income tax, mortgage payment and insurance.
- See also, discretionary spending.
Occasional or Periodic Expense
- Expenditure of money, that occurs from time to time and occurs on a regular basis
Opportunity Cost
- The cost of passing up the next best alternative when making a decision
Scarcity
- The basic economic situation, limited resources with unlimited wants
Surplus
- The amount by which revenue exceeds expenditure
Wants
- Goods and services that an individual would like to have.
- Examples include an upgraded computer, a sports car, or dance training.
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