To Lend or to Borrow Directions: Read the story and answer the questions that follow.

Transcription

1 EXERCISE 13.1 THE ME 3 Lesson 13: Buddy, Can You Spare a Dime? To Lend or to Borrow Directions: Read the story and answer the questions that follow. Tia s mom dropped Tia and Tia s friend, Morgan, off at the local Burger Barn next to the Skate Place. Tia and Morgan planned to skate for a couple of hours after lunch. As they were waiting to order, here s what happened. Morgan, my mom forgot to give me money, Tia said. She was supposed to give me $5. Now, I don t have enough money for lunch and skating. How much money do you have with you, Morgan? After checking her backpack, Morgan said, I guess I have a little extra. Great, I ll be happy to pay you Monday at school if you lend me money for a hamburger and fries today, Tia said. Okay, Morgan said. I ll order a Big Barn Burger, large fries, and a shake. What about you? Tia asked. Wait a minute. If I give you enough money for all of that, then I won t have any money left for the rest of the weekend. You said you were going to have a hamburger and fries, Morgan said. Morgan, tomorrow is Sunday, Tia said. How much money will you need on Sunday? I said I d pay you Monday. I m too hungry for just a hamburger and fries. Besides, I m your very best friend. I don t know, Tia. My family is going to a church picnic tomorrow. There will be games and stuff. My parents will give me some money to spend, but I may want to spend more than that. I m not sure. I have to think about this, Morgan said. Well, don t take too long. After all, the skating session starts in 30 minutes, Tia said. 58 FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education

2 THEME 3 Lesson 13: Buddy, Can You Spare a Dime? EXERCISE 13.1 Questions 1. What is Morgan s problem? 2. Are there costs for Morgan if she lends money to Tia? What are some of these costs? 3. Are there benefits for Morgan if she lends money to Tia money? What are some of these benefits? 4. If Tia borrows the money, what are the costs? 5. If Tia borrows the money, what are the benefits? 6. If you were Morgan, what would you do? 7. If you were Tia, what would you do? FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education 59

3 EXERCISE 13.2 THE ME 3 Lesson 13: Buddy, Can You Spare a Dime? Benefits and Costs Benefits are the gains received from an action taken. Benefits may be monetary, the use of a good or service, a good feeling, friendship, or establishing trust. Costs are what is given up when an action is taken. Costs may be monetary, the value of a lost opportunity, a bad feeling, or a loss of friendship. Your teacher will give you a card with a situation. 1.Identify the problem in the space below. For example, decide whether to lend something to a friend. 2.As your group discusses the costs and benefits of the action described on the card, record the costs and benefits below. Costs: Benefits: 3.Write your group s decision in the space below. 4.Explain your group s decision. The benefits were > or < the costs. (Circle one.) 60 FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education

4 Labeling Label each of the following items with G for goods or S for services: gum dog grooming bike repair candy bar book haircut doctor visit toy T-shirt basketball Use words from the following list to complete the sentences below. Not all words from the list are used. touch economic wants consumers goods services 1. Goods are things that we can. 2. are activities that people perform for others to satisfy wants. 3. People consume goods and services to satisfy. 4. are people whose wants are satisfied by using goods and services. FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education 61

5 Word Search Puzzle Read the sentences below; find the word that completes each sentence in the word search puzzle. 1. A written order that gives a bank permission to pay someone with money from your bank account is called a. 2. A card lets a person buy now and pay later. 3. Mike s bank account balance was automatically adjusted when he used his card to get cash from the ATM. 4. Before you can get a loan, you must complete a credit. 5. If you are trustworthy and have a good credit history, you are considered. 6. When Sam uses his credit card, he buys something now and must pay in the. 7. is earned when a bank pays you for its use of your money. 8. A credit report is a record of a person s credit. A P P L I C A T I O N C O S T C R E C R E D E C A T A P L I S T P R I C P P E D A L H I S T O R Y D E B I T R E P O R T T E H T O A E I D B I T I N T E R T I B C D I N T E R E S T I N C O M T D O M K A F U T U R E R A P P L I C E F E I N T C O S T R U S T Y H T R R O W D E B T L E N D E B O R R C A C R E D I T W O R T H Y 62 FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education

6 Matching Questions In the blank before each advertisement, write the letter that shows the type of advertisement appeal used. Everybody s chewing it, chewing it, chewing it, CHEWY GUM. White & Bright toothpaste is recommended by the American Dental Association. I m Roger Rapidfeet, famous basketball star. I wear Flexible Flyers to race down the court. Quake Detergent has better stain removers than other brands. a. Authority endorsement b. Celebrity endorsement c. Quality comparison d. Bandwagon e. Brand loyalty FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education 63

7 Multiple-Choice Questions 1. Celina wants to go to the mall with her friends on Saturday. If she spends $5 on lunch at the mall, she won t have the $5 to pay for the book she wants to buy. The book is Celina s. a. service b. opportunity cost c. income d. wage 2. John agrees to lend his brother Hal $10. Hal agrees to pay John $5 next month and $5.50 the following month. The extra 50 cents is for. a. wages b. goods c. interest d. services 3. Friday night, Linn baby-sat for her neighbor. The neighbor paid Linn $9.00. The $9.00 is Linn s. a. income b. opportunity cost c. interest d. trade-off 4. Andy agrees to lend Sue $5. He tells Sue that she must give him her new InShrink CD. When Sue repays the $5, Andy will return the CD. The CD is an example of. a. opportunity cost b. collateral c. interest d. income 5. Money lent, usually for a fee, is called. a. interest b. collateral c. opportunity cost d. credit 64 FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education

8 Short-Answer Questions 1. Read the advertisement for Chocolate Deluxe and answer the four questions that follow. Chocolate Deluxe The best chocolate treat you ll ever eat Each bar is 6 ounces of sweet creamy chocolate and caramel This treat contains absolutely no nuts On sale, only 50 cents each Try it, you ll really like it! a. List three statements of fact used in the ad. b. How do you know these statements refer to facts? c. List two opinions stated in the ad. d. How do you know these are opinions? FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education 65

9 Short-Answer Questions, continued 2. List two benefits of borrowing and two costs of borrowing. 3. List two benefits of lending and two costs of lending. 4. Write a short paragraph explaining what the following statement means: When I choose, I also refuse. 5. Write a paragraph explaining what is meant by the following statement: Lending and borrowing are two sides of the same coin. 66 FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education

10 Extended-Response Question Your friend Angela wants to borrow $10. Last week, she borrowed your favorite sweatshirt. When she returned it, there was a stain on the sleeve. The last time you lent her money, she didn t repay the loan when she was supposed to repay it. Write a letter to Angela explaining why you aren t willing to lend her money this time. You must use the following terms correctly in your letter: credit history, creditworthy, and trust. Be sure that you explain what these terms mean so that Angela will understand. Remember to use correct letter format, grammar, spelling, and punctuation. FINANCIAL FITNESS FOR LIFE: Student Workbook Grades 3-5 Council for Economic Education 67

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