University of Arkansas ECON 101 PFP Chapter 4 Q&A Updated Summer 2023.

1. What does a household represent? A. An organizational structure that unites its occupants. B. A structure with a form that affects a business. C. The combined financial actions of a family. D. Logical decision making by a family. E. None of the above. 2. Which of the following best describes a household? A . An organization of multiple people who live in the same dwelling and share financial and other resources intended for the well-being of its members. B. A structure for one individual that lives in the same home. C. A organized financial relationship with a relative. D . An organization of one or more people who live in the same dwelling and share financial and other resources intended for the well-being of its members. E. None of the above. 3. How does a multiperson household lead to financial efficiencies? A. Reduction in income fluctuation. B. Specialization of task. C. Economies of scale. D. All of the above. E. Only b and c. 4. A household's sharing of fixed costs for shelter and other goods is an example of: A. Reduction in income fluctuation. B. Specialization of task. C. Economies of scale. D. All of the above. E. None of the above. 5. What are the legal responsibilities associated with a household consisting of unmarried persons? A. Marital responsibilities set by the government. B. Few legal responsibilities unless set by contract recognized by state or local municipality. C. Favorable tax treatment that result in tax deduction. D. Reduction in risk of income fluctuation. E. None of the above. 6. What is the effect on taxation of a household consisting of unmarried persons with children? A. Favorable tax treatment for single adult-head of household in income taxation B. Unfavorable tax treatment for single adult-head of household in income taxation C. A disadvantage for income taxation. D. Only a and c. E. Only b and c. 7. What percentage of U.S. households consist of married couples with children? A. A little less than 75 percent. B. A little more than 50 percent. C. A little less than 40 percent. D. A little more than 30 percent. E. None of the above. This study source was downloaded by from CourseH on :59:43 GMT -06:00 8. Which of the following may be a reason why household savings in the U.S. have declined n recent years? A. Below average growth of the single-adult-household category (including households with children). B. Above average growth of the single-adult-household category (excluding households with children). C. Above average growth of the single-adult-household category (including households with children). D. Below average growth of the single-adult-household category (including households with children). E. None of the above. 9. Why is theory useful to the personal financial planning process? A. With theory, we can attempt to explain why people do what they do. B. The assumptions required by theory are always realistic. C. Theory encapsulates all of reality. D. All of the above. E. None of the above. 10. The method by which people select goods and services to satisfy their needs is: A. The theory of market selection. B. A mechanical process. C. The theory of household finance. D. The theory of consumer choice. E. None of the above. 11. How do people select goods and services from those made available in the marketplace? A. By grouping g