The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.
Answer the following statement true (T) or false (F)
True
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Refer to the figure above. Which of the following statements is true when the credit demand curve is CD2 and the credit supply curve is CS1?
A) At all rates of interest below 7% there will be an excess demand for credit. B) At all rates of interest below 5% there will be an excess demand for credit. C) At all rates of interest below 6% there will be an excess demand for credit. D) At all rates of interest below 8% there will be an excess demand for credit.
Costs that are incurred when people engage in a trade
A) are a waste of resources because they do not create benefits of equal or greater value. B) can be eliminated by substituting government regulation for voluntary exchange. C) reduce the amount of exchange that occurs. D) rise as the number of middlemen increases.
Why does the presence of imperfect information lead to inefficiency?
What will be an ideal response?
Suppose the interest rate is 7 percent. Consider four payment options: Option A: $500 today. Option B: $550 one year from today. Option C: $575 two years from today. Option D: $600 three years from today. Which of the payments has the highest present value today?
a. Option A b. Option B c. Option C d. Option D