Here are the correct answers for your Economics Review quiz, with simple explanations to help you understand why they are right.
1. The money that you keep to use later is called _______.
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Reasoning: In economics and personal finance, when you set aside money today to spend in the future instead of spending it now, this action is defined as saving. "Stash" and "lucky dollars" are informal slang terms, not the proper economic term.
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Answer: B) your savings
2. Which one of the following is a NEED?
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Reasoning: A "need" is something essential for survival or basic well-being (like food, water, shelter, and clothing). A "want" is something nice to have but not necessary.
* An iPhone, a new bike, and movie tickets are all wants. You can live without them.
* Warm clothes are a need because they protect your body from the cold and keep you healthy.
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Answer: A) warm clothes
3. When you keep your money to spend later, you _______ it.
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Reasoning: This question describes the action of holding onto money for future use. The verb for this action is "to save." If you "spend" it, you are using it now, not keeping it for later.
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Answer: A) save
4. If you are making a choice between buying a bike or a scooter, what do you call the thing you DO NOT pick?
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Reasoning: This concept is called "opportunity cost." It represents the value of the next best alternative that you give up when you make a choice. If you choose the bike, the scooter is your opportunity cost (and vice versa). It’s not called "the loser" or just a "decision."
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Answer: C) opportunity cost
5. Treyvon has a basketball. Drake has a football. Treyvon wants a football and Drake wants a basketball. What can they do so they each get the ball they want?
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Reasoning: Since both boys have something the other person wants, the best solution is to exchange items. This is called trading or bartering. Taking without asking is stealing, and drawing a picture doesn't give them the actual ball they want.
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Answer: B) barter (trade) for the ball they want
6. Michigan grows apples. California grows oranges. How can people in Michigan get oranges while people in California get apples?
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Reasoning: This is an example of trade based on specialization. Michigan has plenty of apples, and California has plenty of oranges. By trading their surplus goods, both states get what they lack. Option A suggests trading for corn, which doesn't solve the problem of getting oranges. Option B correctly describes swapping apples for oranges.
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Answer: B) Michigan can trade apples for oranges from California.
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Final Answer:
1. B
2. A
3. A
4. C
5. B
6. B
Parent Tip: Review the logic above to help your child master the concept of social studies for grade 2.
