Unit 5: Personal Finance and Microeconomics

Transcription

1 Due by the day before you take the exam. Additional copies will not be provided by the teacher but may be printed by the student. Unit 5: Personal Finance and Microeconomics LESSON ONE: Microeconomics 101: Scarcity & Decision making 1. Define scarcity and give an example of how scarcity affects economic choices. 2. Create your own example that demonstrates the concept of opportunity cost. 3. Give two examples of economic wants and two examples of economic needs. Wants Needs Answer these essential questions for lesson 1 in the space below. 1. How does scarcity influence microeconomic decision making? 1

2 LESSON TWO: Financial Planning: Budgeting 101 Match each definition / example below to the term from this word bank. Net Pay Gross Pay Disposable Income Discretionary income W 4 Form W 2 Form Mortgage Utilities Withholdings Fixed costs Variable Costs Direct Deposit 4. amount of money earned before taxes and other withholdings are removed. 5. IRS form filled out by individuals upon being hired at a job that indicate the number of allowances they are taking. Responses influence the percentage of earnings that will be withheld from their paycheck for state and federal income tax. 6. money available to an individual/household AFTER taxes are paid. 7. available to an individual/household to pay for economic wants, retirement savings, and other optional expenses. 8. expenses that change from month to month, such as heating costs, groceries, gasoline. 9. Usually a fixed cost, this is a loan an individuals must repay to a bank in order to purchase a home. 10. Used to refer to all money held back from an employees paycheck to pay for taxes, insurance or retirement plans. 11. These non discretionary expenses include electricity and water. 12.Sally needs to complete a review packet worth 10% of her final grade. The packet is due tomorrow. Instead, she goes to the movies with friends and does not finish the packet. What is the opportunity cost of going to the movies? 13.Identify Jack s total revenue, total costs, and his profit. Jack opened a convenience store last month. He paid $1200 in rent for his store, and paid $1800 for his inventory. Business was good. Jack sold $1300 worth of snacks and sodas and $2700 in gasoline. After paying his employees a total of $600, Jack sits down to see how well he did. a. Jack s Total Revenue is: $. His Total Costs are: b. Jack s profit / loss for the month is $. (if a loss, include negative sign) 14.What is the purpose of making a personal budget? 2

3 Answer these essential questions for lesson 2 in the space below. 2. What does it mean to be financially and fiscally responsible? 3. What factors should guide wise financial planning? LESSON THREE: Personal Finance 101: Banking and Credit 15.What might cause someone to have bad credit? How does a person s credit score affect the interest rate they are offered on a loan? 16. What purposes do checking and savings accounts serve for banks? 17.What purposes do checking and savings accounts serve for individuals? Answer these essential questions for lesson 3 in the space below. 4. What purpose do checking and savings accounts serve for banks and for individuals? (SIMPLY ANSWER SEPARATELY ABOVE) 5. How does credit work and why is my credit score important? 3

4 Lessons 4 & 5: Lesson 4 Career Planning & Retirement Security Lesson 5: Don t get Scammed! Consumer Protection 18.What is the basic difference between an employee and an independent contractor? 19.Explain what an investment is. 20.Describe the possible risks and rewards of investing in the stock market. Answer these essential questions for lesson 4 in the space below. 6. How does education influence my career options? 7. What steps can I take to improve my retirement security? 4

5 Match the terms in this wordbank to the definitions / examples that they best fit. 401(K) Stock Pension Identity Theft Entrepreneurship Class Action Lawsuit Roth IRA Independent Contractor Product Recall Better Business Bureau Securities & Exchange Commission Consumer Protection Law 21.. To avoid this, individuals should keep their social security number, bank account numbers, & other personal financial information private & secure. 22. Consumers might file one of these if they realize that a company has defrauded large numbers of people or has used deceptive practices to gain an unfair and illegal advantage in the marketplace. 23. Consumers worried that a company is trying to scam them should call this agency and file a report. 24. A method of putting money aside for retirement that allows you to pay taxes now and buy stock, so that when you sell the stock upon retirement the money is tax free. 25. creating and running your own business. 26. individuals that complete specific tasks or projects for a company in exchange for payment, but are not employees and must pay their own taxes. 27. retirement accounts set up by employers that employees may contribute to. Sometimes employers match employee contributions. Answer these essential questions for lesson 5 in the space below. 8. How can I avoid scams and bad financial decisions? 9. What role does government play in consumer protection? 5