Chapter 7 Quiz Review

One way that all consumer behavior is alike is that all consumers

• have similar tastes and wants.

• share the same religious beliefs.

• buy to satisfy their needs.

• are the same age.

Answer explanation

Everyone has to meet their basic needs (or satisfy their necessities).

If consumer spending increases, which of the following will decrease?

• Prices

• Unemployment

• Production

• Business Activity

Answer explanation

If consumers demand more goods and services, businesses will open and others will expand in order to provide those goods and services. They'll hire people to work in those businesses.

Which of the following is the most important factor in determining how much consumers spend?

• Gender

• Age

• Income Size

• Marital Status

Answer explanation

People who are less wealthy can't afford to buy as much. Wealthy people spend more.

Buying which of the following is an example of conspicuous consumption?

• Notebook and Pens

• School Lunch

• Expensive Watch

• Prom Tickets

Answer explanation

Conspicuous consumption is sort of like "showing off" through purchases.

When might you wait to buy something rather than buying now?

• You're expecting prices to go up later.

• You've just landed a new job.

• You just got a pay raise.

• You're expecting prices to fall soon.

Answer explanation

You're likely to buy when the prices are cheapest.

When might you buy something now, rather than waiting?

• You're expecting prices to go up soon.

• You're expecting prices to fall soon.

• You're about to lose your job.

• You're thinking a better product is about to be released.

Answer explanation

Again, you want the best price. Aside from the two responses related to price, the other two reasons are reasons people may to wait to buy.

"Keeping up with the Joneses" refers to

• the goods and services that we need to exist.

• those things that satisfy people's wants and needs.

• excessive spending to impress others.

• spending to stay on the same level as friends and neighbors.

Answer explanation

This is like buying a new Porsche because your neighbors already have expensive sports cars.

What percentage of the world's resources do Americans use?

• 10%

• 30%

• 50%

• 70%

Within the U.S. who buys most goods and services?

• Businesses

• Consumers

• Governments

• They all buy the same amount of goods and services.

Answer explanation

Remember the pie graphs that we worked on in class. Consumer spending in the U.S. is greater than business and government spending put together.

Mrs. Bartell goes back to work, bringing a second income to the family. What effect will this have on the Bartell's spending?

• They will spend less on necessities.

• The proportion of income they spend on necessities will rise.

• The proportion of income they spend on luxuries will rise.

• Their luxury spending will drop.

Answer explanation

Well-to-do families can afford to spend more of their income on luxuries.

Less wealthy families spend more of their money on necessities.