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Chapter 1

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

Tangible items that can be touched, used, and purchased are _____.
A.
services
B.
goods
C.
wants
D.
needs
 

 2. 

Ethical behavior calls for honesty. Which of the following actions could be considered ethical?
A.
Borrowing a classmate’s homework to copy the answers.
B.
Studying for a test with a friend.
C.
Checking personal e-mail at work during your shift.
D.
Returning a homecoming dress to the store after wearing it to the dance.
 

 3. 

Which of the following is an example of a human resource?
A.
knowledge
B.
time
C.
money
D.
possessions
 

 4. 

When one goal must be achieved in order to achieve another goal, the two goals are _____.
A.
important
B.
conflicting
C.
unattainable
D.
interdependent
 

 5. 

What decision-making strategy weighs the costs against the benefits of an action, purchase, or financial decision?
A.
marginal analysis
B.
opportunity costs
C.
cost-benefit analysis
D.
common sense
 

 6. 

What is the first step of systematic decision-making?
A.
Explore the alternatives.
B.
Evaluate the decisions.
C.
Define the decision to be made.
D.
Act on the decision.
 

 7. 

The correct order for the three stages of management are _____.
A.
evaluation, planning, and action
B.
planning, action, and evaluation
C.
planning, evaluation, and action
D.
action, evaluation, and planning
 

 8. 

Forms of communication designed to reach a large number of people refers to _____.
A.
technology
B.
media
C.
social media
D.
globalization
 

 9. 

Social Security, Medicare, and Medicaid are examples of what?
A.
entitlements
B.
outsourcing
C.
globalization
D.
technological advances
 

 10. 

____ gives you access to a vast diversity of goods and services through worldwide markets.
A.
Social media
B.
Globalization
C.
Technology
D.
Offshore outsourcing
 

Matching
 
 
Match the following terms with their definitions.
A.
financial literacy
B.
financial plan
C.
want
D.
service
E.
value system
F.
priority
G.
resource
H.
financial competence
I.
marginal benefit
J.
law of diminishing marginal utility
K.
opportunity cost
L.
management
M.
economic conditions
N.
inflation
O.
demographics
 

 11. 

Overview of an individual’s current financial position and strategies to meet future financial aspirations.
 

 12. 

Having the ability to understand basic topics related to finance.
 

 13. 

Value of the option you gave up.
 

 14. 

Process of organizing and using resources to achieve predetermined objectives.
 

 15. 

Intangible activity that another person usually performs for a fee.
 

 16. 

Change in total benefit of using one additional unit.
 

 17. 

Possession of a body of financial knowledge, a set of basic skills, and the ability to apply knowledge and skills to making informed, responsible financial choices.
 

 18. 

Supply of something that can be used when needed.
 

 19. 

State of the economy at a given time.
 

 20. 

Overall structure of values and goals that guides a person’s behavior and provides a sense of direction in life.
 

Completion
Complete each statement.
 

 21. 

The process of setting financial goals and developing plans to reach them while meeting financial needs is _____________________________________________.
 

 

 22. 

A(n) _____________________________________________ is an individual who purchases goods and services for his or her own use.
 

 

 23. 

_____________________________________________ are principles and beliefs that a person considers important.
 

 

 24. 

Moral principles or beliefs that direct a person’s behavior are _____________________________________________.
 

 

 25. 

A(n) _____________________________________________ is an established measure of quality, value, or quantity.
 

 

 26. 

A(n) _____________________________________________ shows that it is in your interest to take an action or make a purchase only if the benefits are at least as great as the costs.
 

 

 27. 

The change in total cost of using one more unit is the _____________________________________________.
 

 

 28. 

A(n) _____________________________________________ is the choice you give up when you make one choice over another.
 

 

 29. 

A(n) _____________________________________________ is a period of slow or no economic growth.
 

 

 30. 

Money paid for the use of money is _____________________________________________.
 

 



 
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