they were referred to as whoever was their father (Abraham son of Terah) (Isaac and Ismael, sons of Abraham) or where they lived (Jesus of Nazareth)
makes it easier to learn the characters of the bible too, with the use of who their fathers were or towns they grew up in I think... I like to play around with their lineages...see who belonged to whom.For instance, one of my favorites characters is Ruth...her great grandson was David! cool huh?
Almost certainly not. Surnames are a relatively recent historical development, going along with increased mobility, and especially increased urbanization. Once, a large proportion of the population lived in small villages; now, most of us live in large cities and know multiple "Daves" and "Sarahs." We need a convenient way to distinguish them. (The bureaucracy, of course, primarily uses numbers nowadays, in the industrialized world at least. It's interesting that in some nations, such as Indonesia, it is not that uncommon for people not to have a surname; perhaps the surname system will not become established in such countries, since a given name and an ID number will be all that's really needed.)
Returning to your question, you'll note that in Scripture, the function of surnames is filled (when necessary) by descriptions. Sometimes these are geographical, as "Joshua the Midianite." (A made-up example.) Sometimes they are relational, as "Joshua, the brother of Matthew." Had they had surnames back then, presumably they would have used them when there was a risk of ambiguity, not the clumsier locutions I mentioned.
In Jewish tradition, even today, a man's full name is, for example, Isaac ben Abraham, where "ben" means son of. And a woman's name would be Rebecca bat Bethuel, where "bat" means daughter. In both cases, the father's name, not the mother's is given.
And, as noted in other comments, people are also identified by a first name plus a home town (Jesus of Nazareth) or an epithet describing something that the person had done, or was famous for, such as Thomas Didymus (Thomas the Twin), or James the Greater and James the lesser.
Today, in public prayers for healing in the synagogue, people are called by their given name, and then son or daughter of their mother's name.
THEIR LAST NAME, WAS USUALLY THE TOWN THEY CAME FROM HENCE JESUS OF NAZARETH
Even today many last names are descriptions. IE Johnson, Wilkerson, Jackson etc or of a job class IE Smith, Weller, Painter etc.
Last names really evolve to what we popularly called surname, in many cases this means family name. Just like the Bible, Jesus is referred to as Jesus son of Joseph or for others it is referred to the place of birth, like Jesus of Nazareth.
Today most last names refers to our father's family name. But there are laws that made it possible to choose your last name.
Some people aren't going to like this but - do characters in fairy tales have last names?
Best I can tell is only Jesus Christ has a first and last name. And I don't think that his mother and step father last name was Christ, for the record. Good question for thinking outside of the box!
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