Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000 . She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%. Emily's annual implicit cost of capital is
a. $2,000.
b. $4,000.
c. $12,000.
d. $14,000.
a
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Between 1890 and 1914, the gold stock of the world _______________ and world prices (in general)
A) doubled; increased. B) tripled; increased. C) rose by 50%; increased. D) doubled; decreased. E) tripled; decreased.
Suppose the most you would be willing to pay for a plane ticket home is $250. If you buy one for $175, then your economic surplus is:
A. $0. B. $75. C. $250. D. $175.
If demand for a good decreases and supply remains constant equilibrium price:
a. Will increase, and equilibrium quantity will decrease b. And quantity will both increase c. And quantity will both decrease d. Will decrease, and equilibrium quantity will increase
Firms that are "breaking even" are
A. shutting down in the short run. B. earning less than a normal rate of return. C. earning zero economic profits. D. All of the above are correct.