Needs vs. Wants
What is a need?
Something essential for survival (food, water, shelter).
What does the “P” in PACED stand for?
Define the Problem
Scarcity exists because resources are ___________ and wants are ___________.
Limited; Unlimited
What is a short-term financial goal?
A goal to achieve within 1 year.
Define a trade-off.
Giving up one thing to get another.
What is a want?
Something desired but not essential (video games, designer shoes).
What is the first step of the PACED model?
Define the problem
Define opportunity cost.
The value of the next best alternative you give up.
Human capital includes a person’s ___________ and ___________.
Skills; Education
True/False – A trade-off always means losing something forever.
False
True/False – A new smartphone is a need.
False
What does the “E” in PACED stand for?
Evaluate alternatives
Fill in the blank: Scarcity forces people to make ___________ about resource use.
Choices
True/False – A 5-year savings plan for college is a short-term goal.
False (medium-term)
Fill in the blank: Values are the ___________ principles that guide financial decisions.
Guiding
Fill in the blank: Wants enhance your ____________ of life but are not necessary for survival.
Quality
Fill in the missing PACED step: Problem, Alternatives, Criteria, ______, Decision
Evaluate
Which of these is an example of opportunity cost?
A) Buying a game instead of saving for a concert
B) Paying the price plus tax
C) Buying something on sale
D) Avoiding a decision
A) Buying a game instead of saving for a concert
Which person will likely earn the highest wages due to their human capital?
A) High school-trained medical secretary
B) Physical therapist assistant with an associate degree
C) Automotive technician with a trade certificate
D) Computer systems analyst with a bachelor’s degree
D) Computer systems analyst with a bachelor’s degree
Scenario – You work overtime instead of going to a party.
What is your trade-off?
Missing the party/free time
Which of the following is a need:
A) Movie ticket
B) Designer coat
C) Winter coat in cold climate
D) Smartphone upgrade
C) Winter coat in cold climate
Scenario – Jake is choosing between two laptops.
Which step of PACED helps him compare features and prices?
Evaluate Alternatives
Scenario – You decide to study for a test instead of working a 4-hour shift.
What is your opportunity cost?
The wages you would have earned during that shift.
Fill in the blank: Investing in education and skills increases your ___________ capital.
Human
Scenario – You choose to donate to charity instead of buying a new jacket.
Which financial factor influenced your decision?
Values