AnswersLVA-Economics SPRINGCase Study: Starting a Business

Case Study: Starting a Business — Cumulative exam Answers

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1
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What is one cost of avoiding insurance?

A
falling into debt if faced with a serious problem
B
not benefitting from insurance deductibles
C
not being able to purchase a car or home
D
facing increased probability of accidents
2
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A pure market economy is sometimes called pure

a
a. command economy.
s
socialism.
c
communism.
c
capitalism.
3

What does purchasing insurance for a business reveal about the business owner’s attitude toward financial risk?

A
It shows that the owner expects financial risk and is eliminating it by making an insurance company liable.
B
It shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.
C
It shows that the owner is willing to share ownership of the business to reduce financial risk.
D
It shows that the owner is willing to budget for short-term financial risks to avoid long-term risks.
4

Yuri wants to pay for his new chair using a check. What must he consider before using that method of payment?

A
Yuri must check his credit history.
B
Yuri must know the interest rate on a furniture loan.
C
Yuri must be sure he has enough left in his checking account for any expenses and automatic payments.
D
Yuri must check his credit card balance.
5

Which statement best describes lifetime income?

t
the total salary for all the years worked
t
the total salary and retirement benefits for all the years worked
t
the total salary and value of insurance benefits for all the years worked
t
the total cost of college classes and vocational training divided by the total years worked
6

Which information can be found on a person’s credit report? Check all that apply.

A
an unpaid utility bill that has been given to a collection agency
B
the person’s credit rating
C
the person’s yearly income
D
the person’s social security number
E
an inquiry from a bank that requested the person’s credit report
F
the person’s education level
7

What is one difference between a vocational school and on-the-job training?

A
A vocational school degree takes one year to earn. On-the-job training takes two or more years.
A
A vocational school degree takes weeks or months to earn. On-the-job training takes two years or fewer.
A
A vocational school is usually paid for by the worker. On-the-job training is usually paid for by the employer.
A
A vocational school is usually paid for by the employer. On-the-job training is usually paid for by the worker.
8

Which living expense needs to be included in the budget of someone renting an apartment?

A
property taxes
B
insurance
C
down payment
D
maintenance
9

most likely

t
the private business that operates the farm.
t
the government group that runs the farm.
t
the individual who manages the farm.
t
the family who owns the farm.
10

Yarin’s gross pay for the year was $3,500. The federal income tax withholding from his pay was 9% of his gross pay. Yarin determined the federal income tax he owes is $115. How much of a refund can Yarin expect?

$
$200
$
$315
$
$3,035
$
$3,185
11

most likely

p
plan to rent out their homes.
m
must repay the loan in five to ten years.
a
are unwilling to accept any risk in borrowing money.
r
remain in their homes for 30 years or more.
12

What are some ways to address unemployment in a market economy? Select three answers.creating new projectsincreasing regulationlowering restrictionsraising more taxespromoting hiring

c
creating new projects
i
increasing regulation
l
lowering restrictions
r
raising more taxes
p
promoting hiring
13

The graph shows the percentage changes in the investment rate and the gross domestic product (GDP) between 2008 and 2012.

Question illustration
A
can show if the economy is growing or shrinking.
B
occur only when the economy is shrinking.
C
occur only when the economy is growing.
D
have no relation to changes to the GDP.
14

Natalie’s income statement for the month of October is shown. What is Natalie’s net income for the month of October?

Question illustration
A
$930.00
B
$980.00
C
$1,930.00
D
$1,980.00
15

similardifferentallrandom

A
similar
B
different
C
all
D
random
16

Marcus deposited his paycheck in the amount of $625.84. He’ll use the check register to record his transaction. What will be his new balance? Do not use commas in your answer. $

Question illustration
Answer not available
17

Question text not available

Answer not available
18

When prices drop below the point where supply and demand meet, it results in

A
coordination.
B
disequilibrium.
C
equilibrium.
D
production.
19

Lauren is trying to find her net income. She used the statement and the steps shown.Step 1List all income, including tips and commissions, and list all expenses, including food, entertainment, and clothing.Step 2Total all the income. Then total all the expenses.Step 3Add the total of the income and the expenses.Which explains Lauren’s error?

Question illustration
L
Lauren made an error in step 1 because she should not include tips and commissions in her income.
L
Lauren made an error in step 1 because she should not include entertainment in her expenses.
L
Lauren made an error in step 2 because she does not need to total the expenses.
L
Lauren made an error in step 3 because she should have subtracted the expenses from the income.
20

Iliana’s gross pay is $2,130 per month. Her deductions total $270. She budgets for $1,000 in fixed expenses and $400 in variable expenses. How much money will Iliana be able to save?

A
$270
B
$460
C
$730
D
$860

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