True/False
Indicate whether the sentence or statement is true
or false.
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1.
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Once
set, people's values remain the same throughout their lives.
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2.
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Needs
are the things you can't live without while wants are the things that you would like to have but can
live without.
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3.
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As
people pass through stages in their life cycles they often change their goals.
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4.
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The
decision making process helps you make buying decisions in an organized, logical
manner.
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5.
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According to the law of demand, consumers will demand less of a product at a lower
price than at a higher price.
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6.
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Businesses rarely pass the cost of advertising on to consumers in higher
prices.
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7.
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An ad
that accidentally misleads consumers is an example of deceptive advertising.
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Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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8.
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A
purchase made on a whim without using a decision making process is a(n) ____. a. | trade-off
purchase | b. | impulse purchase | c. | option
purchase | d. | opportunity purchase | | |
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9.
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An
economy in which the government tells you what to produce is a description of a
____. a. | mixed
economy | b. | command economy | c. | market
economy | d. | traditional economy | | |
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10.
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Some
primitive tribes in remote areas still live in ____. a. | command
economies | b. | mixed economies | c. | traditional
economies | d. | market economies | | |
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11.
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The
fact that U.S. businesses and consumers are able to make most economic decisions within limits set by
the government shows that this country has a ____. a. | command
economy | b. | market economy | c. | traditional
economy | d. | mixed economy | | |
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12.
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The
quantities of a product that producers are willing and able to make available for sale at various
prices over a given time period is said to be ____. a. | surplus | b. | supply | c. | demand | d. | shortage | | |
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13.
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Advertising that tries to win your favor by comparing its product's qualities to those
of a competing product is called ____. a. | persuasive advertising | b. | comparative
advertising | c. | brand advertising | d. | informative
advertising | | |
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14.
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Advertising that is designed to appeal to your emotions to influence you to buy is
called ____. a. | defensive
advertising | b. | persuasive advertising | c. | comparative
advertising | d. | informative advertising | | |
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15.
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Advertisements that are intended to take advantage of consumers by including factually
incorrect statements are ____. a. | legal | b. | puffery | c. | comparative advertising | d. | deceptive
advertising | | |
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16.
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The
equilibrium price for a product is the price at which the quantity supplied is ____. a. | more than the
quantity demanded | b. | less than the quantity demanded | c. | exactly equal to
the quantity demanded | d. | none of the above | | |
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17.
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The
advertising that provides information that helps you make a good buying decision is called
____. a. | comparative
advertising | b. | informative advertising | c. | persuasive
advertising | d. | defensive advertising | | |
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18.
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One
day while shopping with some friends, without thinking you decide to buy a new computer game with
money you had intended to use for a new pair of shoes. This purchase is an example of a(n)
____. a. | buyer's
remorse | b. | rational buying decision | c. | need | d. | impulse purchase | | |
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19.
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Every
country must deal with the situation in which consumers' wants are greater than the resources
available to satisfy those wants. This situation is known as ____. a. | law of
demand | b. | scarcity | c. | production | d. | law of supply | | |
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20.
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One
night while watching television, you see an advertisement explaining the technical aspects of
operating a particular type of digital camera. You now feel more comfortable about using the product
and decide to purchase it. This type of advertising is known as ____. a. | informative | b. | brand | c. | comparative | d. | persuasive | | |
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21.
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Now
that Denise has her first job, she needs to purchase a few new items of clothing. Before going to the
mall, Denise identifies the types of clothes she will need and the amount she can afford to spend.
She then plans specific steps to gather information about the clothing that she wants. Denise's
buying process could best be described as ____. a. | impulse buying | b. | rational
buying | c. | random buying | d. | none of the
above | | |
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22.
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For
several generations Joaquin's family has produced and then sold beautifully handcrafted baskets in
the local market. The basket-making skill is passed down from one generation to the next. Joaquin's
family custom is an example of what type of economic system? a. | market
economy | b. | mixed economy | c. | demand
economy | d. | traditional economy | | |
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23.
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Elisa
has decided to start her own business selling handmade rag dolls. She buys the dolls for $5 each from
women who make them in her community. She then sells them to tourists for $9 from a stall she rents
at a local market. If she subtracts the cost of renting the stall and buying the dolls from the money
she earns selling dolls she will determine her ____. a. | profit | b. | opportunity cost | c. | demand | d. | resources | | |
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Completion
Complete each sentence or
statement.
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24.
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The
value of your next best alternative whenever you make a choice is called the
_____________________.
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25.
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The
study of the role consumers play in an economic system is _____________________.
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26.
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Gina
wants to complete an associate's degree from a local business college within the next nine months. In
order to achieve her goal, she must become a full-time student and attend classes from 8 a.m. until
3:30 p.m., Monday-Friday. This will force her to give up her full-time job and the income it
provides. However, she knows that in the long run this sacrifice will help her reach her goal. The
income she gives up is known as her _____________________.
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Short Answer
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27.
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Suppose members of a new musical group all wear bright orange leather jackets. The
group becomes very popular and many people try to dress just as they do. Explain what would happen to
the demand and equilibrium price for bright orange leather jackets if this happened.
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