Mike wants to open his own repair shop, and is considering using his savings of $30,000 to get it started. He is currently earning 3 percent interest on his savings. His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money. If Mike were to use the money to open his own repair shop, how can he accurately account for his costs?
A. Mike must consider the $900 in forgone interest on his savings as an implicit cost.
B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost.
C. Mike must consider the $900 in forgone interest on his savings as an explicit cost.
D. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost.
B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost.
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When Coca-Cola put real cocaine in their soda in the early 1900's, then what else did they create?
A. A new equilibrium point on the Production Possibiliites Curve. B. A more inelastic demand curve. C. A more elastic demand curve. D. A new equilibrium point on the total revenue curve.
If a developing country makes its currency fully convertible, it runs the risk of having too:
A. high levels of domestic saving and investment. B. much domestic saving and not enough domestic investment. C. low levels of domestic saving and investment. D. little foreign investment.
Generally speaking, the greater the amount of financial wealth people hold in the form of near-monies, the:
A. less is their willingness to spend out of their money incomes. B. less is the asset demand for money. C. greater is the transactions demand for money. D. greater is their willingness to spend out of their money incomes.