Anya has decided to start her own hair-styling salon. To purchase the necessary equipment, Anya withdrew $10,000 from her savings account, which was earning 3% interest, and borrowed an additional $5,000 from the bank at an interest rate of 8%. What is Anya's annual opportunity cost of the financial capital that has been invested in the business?
a. $300
b. $400
c. $700
d. $1,650
c
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A subsidy may be used as a corrective device in the case of a positive externality because it will __________ marginal private benefits and __________ demand.
A. increase; decrease B. increase; increase C. decrease; decrease D. decrease; increase
If marginal revenue for a firm is negative,
a. marginal cost must also be negative b. total revenue will decrease if the firm sells more output c. total revenue must also be negative d. the firm should shut down in the short run e. the lost revenue from having to lower its price is less than the additional revenue from higher sales
When the inflation rate of a country is high over a lengthy time period,
a. the year-to-year variability in the rate of inflation is generally small. b. the year-to-year variability in the rate of inflation is generally large. c. decision makers will be able to forecast future rates of inflation accurately. d. there is no reason to believe that the inflation will exert harmful side effects on real output and the prosperity of the country.
Tax laws do not give preferential treatment to some kinds of retirement saving
a. True b. False Indicate whether the statement is true or false