Remember to print a copy of this preview and mark your answers before submitting the actual progress evaluation.

25 questions, 2 points each, 50 points total.

Multiple-choice: Choose the one best answer.

1 . Which personal finance term is best applied to items such as food, clothing, and shelter?

A. needs
B. wants
C. opportunity costs
D. nonessentials

2 . Which term most closely mimics the term opportunity cost?

A. trade-off
B. prospect
C. decision
D. career cost

3 . Jeremiah works outdoors in Alaska. He recently purchased a warm, waterproof jacket that will protect him while he works in subzero winter temperatures. Which term best categorizes Jeremiah's jacket?

A. opportunity cost
B. nonessential
C. need
D. want

4 . Naomi lives in Miami, Florida. On a recent trip to the mall, she couldn't resist purchasing a new bathing suit that was on sale. She now has bathing suits in numerous styles and colors. Which term best categorizes the bathing suit she just bought?

A. need
B. want
C. opportunity cost
D. essential

5 . Nathaniel spent $85 on a new pair of dress shoes. Which term best describes the things he gave up when he used the money for new shoes rather than for some other purpose?

A. goals
B. needs
C. opportunity costs
D. financial costs

6 . Which statement best describes the economic principle of scarcity?

A. We have unlimited resources and limited wants.
B. We have limited resources and limited wants.
C. We have unlimited resources and unlimited wants.
D. We have limited resources and unlimited wants.

Use the passage below to answer questions 7–9.

For several years there has been a drought in the region around a fast-growing city. Nearby reservoirs, which provide the city’s water, are shrinking, and the community is worried about a water shortage. However, many people continue to use large amounts of water for watering their lawns and filling recreational swimming pools, because the local and state governments have failed to ban such activities in this area.

7 . From an economic point of view, which term best describes the water in this scenario?

A. unlimited resource
B. limited resource
C. unlimited need
D. limited want

8 . The use of water for decorative landscaping or to fill swimming pools best illustrates which of the following?

A. scarcity
B. goal
C. want
D. need

9 . Which is the most direct consequence of the lack of a governmental water conservation plan?

A. People use water for nonessential purposes during a drought.
B. People use water only for essential purposes during a drought.
C. Water has become a limited resource.
D. Demand for water is limited.

10 . Which provides the best example of an impulse purchase?

A. a suit to wear to your first post-college job interview
B. a new pair of designer jeans that caught your eye at the store
C. a new set of tires to replace the worn ones on your car
D. a long-planned trip to visit relatives in another state

11 . Which statement best describes the relationship between choices and consequences?

A. Choices and consequences are both decided by the individual.
B. Previous consequences rarely affect future choices.
C. There is no relationship between choices and consequences.
D. Individuals are free to make choices but cannot necessarily choose consequences.

12 . Regarding personal finance, which of the following statements best explains why "even not choosing is a choice"?

A. There are no consequences associated with the failure to make a choice.
B. Failing to make a choice may allow others to make the choice for you.
C. Making choices when facing important decisions is beyond our control.
D. Consequences make people wiser because they learn from their mistakes.

13 . Which statement is most accurate?

A. Avoiding making choices helps one avoid negative consequences.
B. Consequences are the natural result of making choices.
C. Small decisions have no consequences.
D. Choices and their consequences are only rarely connected.

14 . Which best summarizes the first step to take in the decision-making process?

A. Define the problem.
B. Evaluate various options.
C. Review the decision.
D. Identify choices.

15 . Which step in the decision-making process helps individuals learn from mistakes?

A. Define the problem.
B. Act on the choice.
C. Review the decision.
D. Evaluate choices.

16 . Which set includes the primary factors that influence decisions that young people make?

A. parents and friends
B. values and beliefs
C. risks and consequences
D. all of the above

17 . Why is prioritizing an important part of making financial decisions?

A. It helps one to decide which goals are most important.
B. It helps one to review decisions after they have been made.
C. It helps one avoid negative consequences of decisions.
D. It helps one achieve short-term, but not long-term goals.

18 . Trevor is a senior in high school who has set several goals. Which of the following is the best example of one of his long-term goals?

A. to earn a college degree in biology
B. to graduate from high school with honors
C. to become a family practice physician
D. to be accepted to an Ivy League college

19 . Which is not a life-long strategy for reaching financial goals?

A. Obtain financial resources through a career.
B. Invest to achieve long-term financial growth.
C. Borrow wisely and only when necessary.
D. Spend all income to maintain a lifestyle.

20 . Jane set a goal to save $500 over the next twelve months, but after six months she had saved only $65. What should she do to accomplish the goal?

A. Abandon the goal and try to accomplish it next year.
B. Continue the current course of action—make no changes.
C. Decide whether she needs to alter objectives or steps.
D. Set a new goal that she will be sure to accomplish.

21 . Which of the following is not related to good financial planning?

A. Financial planning involves setting goals and making decisions.
B. Financial planning affects one's standard of living now and in the future.
C. Financial planning reduces the amount of money spent on things we need.
D. Financial well-being is closely related to one's education and career choice.

22 . Which of the following is not a characteristic that goals should possess?

A. They should be realistic.
B. They should include a time frame for completion.
C. They should be as abstract as possible so that they can be adapted as time passes.
D. They should include multiple steps for achieving them over a period of time.

23 . Which phrase best defines financial planning?

A. deciding how to earn, spend, save, and invest money to enhance quality of life
B. using a decision-making process to evaluate ways to save or invest money
C. avoiding the influence of friends and peers when making purchasing decisions
D. keeping accurate and detailed financial records to aid in money management

24 . How can establishing objectives help people reach the financial goals they have set?

A. Objectives help people evaluate their choices.
B. Objectives divide goals into smaller pieces.
C. Objectives help people evaluate consequences.
D. Objectives are the same as priorities, so they order the efforts.

25 . Which of the following is not a component of personal financial planning?

A. arranging how to earn, spend, save, and invest
B. career planning and education, or training
C. predicting success based on an individual's socioeconomic background
D. using a decision-making process to achieve goals and objectives