Abeka Consumer Math Practice Test 8

A budget is a plan that outlines income and expenditures to help manage financial resources effectively. It serves as a roadmap for spending and saving over a defined period.

Fixed expenses are costs that remain constant over time, such as rent. Unlike variable expenses that can fluctuate, fixed expenses do not change from month to month.

Subtracting the spent amount from the total allowance gives the remaining funds. In this case, $50 minus $15 equals $35.

Saving money involves setting aside a portion of income to use later, whether for emergencies or future goals. It is a key component of sound financial planning.

Informed consumer decisions stem from researching and comparing products. Evaluating prices and features ensures that the best value is attained before making a purchase.

Opportunity cost represents the benefits forgone when selecting one alternative over another. By understanding what is sacrificed, consumers can make more informed financial decisions.

A 25% discount on a $40 shirt means a reduction of $10 (since 25% of 40 is 10). Subtracting the discount from the original price results in a sale price of $30.

When demand is high relative to supply, prices usually increase due to the scarcity of goods. This relationship is a fundamental concept in economic theory.

Maintaining a spending record provides insight into where money is allocated. This information is valuable for adjusting budgets and curbing unnecessary expenditures.

To find 15% of $200, multiply 0.15 by 200, which equals $30. This calculation shows the weekly saving when committing to this percentage.

Inflation leads to an overall increase in the prices of goods and services. As a result, the same amount of money buys less over time, reducing purchasing power.

Needs are essential for survival and daily living, such as food supplies, while wants are non-essential items like video games. Recognizing the difference helps prioritize spending.

Unit price comparison allows shoppers to evaluate how much they are paying for each unit of a product. This method helps in determining which option offers the best value.

When interest rates rise, the cost of borrowing increases due to higher repayment amounts. This often leads consumers to be more cautious about taking on new debt.

Fixed costs remain constant regardless of production volume, so producing more units spreads these costs thinner. This results in a lower average cost per unit when production is increased.

Compound interest is calculated on both the initial principal and the interest accumulated over previous periods. This leads to exponential growth compared to simple interest, which is calculated solely on the principal.

High levels of consumer debt can restrict future spending capacity due to larger repayments and interest costs. This constraint often forces individuals to adjust their financial priorities and limit discretionary expenses.

A significant purchase often carries additional costs over time, such as maintenance, repairs, or operating fees. Evaluating both the initial and long-term costs provides a complete understanding of the financial commitment.

The inflation rate directly reflects changes in the general price level, which in turn affects how much goods and services can be purchased with a given amount of money. A rising inflation rate typically erodes purchasing power.

An emergency fund offers financial security by providing readily available money during unforeseen events. This proactive measure minimizes disruption to overall budgeting and reduces the need for expensive borrowing.