Question 1

Put the steps of cost-benefit analysis below in the correct order.

Accepted Answer

1. Come up with an option. 2. Determine the costs of the decision. 3. Calculate the amount of benefit that would be gotten from choosing the option.  4. See if the benefits outweigh the costs to make a decision.

Question 2

Put the steps of the sample cost-benefit analysis below to show the correct order of this decision-making process.

Accepted Answer

1. Consider whether or not to spend money on a new car. 2. Figure out how much it will cost to buy and operate a car. 3. Calculate the amount of benefit that would be gotten from choosing the option.  4. See if the benefits outweigh the costs to make a decision.

Question 3

Put the steps below in the correct order to show how a cost-benefit analysis is done.

Accepted Answer

1. Be presented with a decision. 2. List the costs of the decision. 3. Figure out all of the benefits of the decision. 4. Compare costs and benefits to see which is bigger.

Question 4

Because costs and benefits are both subjective, a calculation of the value of a decision is always based on what?

Accepted Answer

Personal opinion

Question 5

Because costs and benefits are both subjective, a person\'s decision will always be based on what?

Accepted Answer

His or her unique values and beliefs

Question 6

People come to different decisions using cost-benefit analysis even under the same conditions because costs and benefits are both what?

Accepted Answer

Subjective

Question 7

Besides tuition, what is one cost of attending college?

Accepted Answer

Missed opportunities to earn income

Question 8

What is one of the monetary benefits of attending college?

Accepted Answer

Increased earning potential in the future

Question 9

What is one of the non-monetary benefits of attending college?

Accepted Answer

The ability to choose a satisfying job

Question 10

Which of the following describes what a lease is?

Accepted Answer

Contract

Question 11

When you rent an apartment, you make a monthly payment to whom?

Accepted Answer

A landlord

Question 12

A lease is an agreement that renters make with whom?

Accepted Answer

Landlord

Question 13

In addition to rent, people who live in apartments often have to pay for what?

Accepted Answer

Utility bills

Question 14

Which of the following are not expenses that apartment dwellers have to pay?

Accepted Answer

The mortgage

Question 15

Which of these helps a landlord pay for damage that renters cause to their apartments?

Accepted Answer

Security deposit

Question 16

How can a renter reduce the amount of money he or she spends on monthly rent?

Accepted Answer

By getting roommates

Question 17

Which of these can help reduce the total cost of living in an apartment?

Accepted Answer

Finding a roommate

Question 18

What is one way to make the rent on an apartment less expensive? Feedback

Accepted Answer

Getting a roommate

Question 19

Match each type of insurance with what the insurance company pays for if there\'s a loss. A. Auto insurance B. Renter\'s insurance  C. Life insurance D. Health insurance

Accepted Answer

C. Money for relatives of someone who dies A. Repairs on damaged vehicles B. Replacement of stolen personal possessions D. Visits to the doctor or hospital

Question 20

Match each type of insurance with what it covers. A. Auto insurance B. Disability insurance  C. Renter\'s insurance  D. Health insurance

Accepted Answer

B. Wages lost because of injury or illness  A. Repairs on damaged vehicles D. Visits to the doctor or hospital C. Stolen personal possessions

Question 21

Match each type of insurance with an example of when your insurance company would make a payment. A. Auto insurance B. Disability insurance C. Homeowner\'s insurance D. Health insurance

Accepted Answer

B. An injury that causes you to lose wages D. An illness that involves a trip to the doctor C. A fire in your house that damages your personal possessions  A. An accident that damages your vehicle

Question 22

When an insurance policy covers replacement value, a loss results in a settlement that pays for what?

Accepted Answer

Brand new items to replace the items lost

Question 23

What kind of insurance provides replacement value for personal possessions?

Accepted Answer

Renter\'s insurance

Question 24

What does homeowner\'s insurance pay for in case of damage to your house and its contents?

Accepted Answer

Rebuilding the house and buying all new items to replace those damaged

Question 25

What does liability insurance cover?

Accepted Answer

The medical and car repair bills for anyone else involved in an accident you caused

Question 26

What does collision coverage insure?

Accepted Answer

The repair of damage caused to your car when you caused the accident

Question 27

What does medical coverage on an auto insurance policy cover?

Accepted Answer

Medical bills for yourself and anyone else in your car in case of an accident

Question 28

What is a health insurance deductible?

Accepted Answer

The amount of a doctor visit charge that isn\'t covered by insurance

Question 29

What is a co-pay?

Accepted Answer

A small payment for a visit to a doctor

Question 30

What kind of health insurance involves a co-pay for doctor visits?

Accepted Answer

Managed care

APEX Econ 7.1: Making Choices – Flashcards

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