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 total opportunity cost of capital is
a. $2,000.
b. $4,000.
c. $12,000.
d. $14,000.
d
You might also like to view...
The balanced budget multiplier is
A) positive because the magnitude of government expenditure multiplier is larger than the magnitude of tax multiplier. B) negative because the magnitude of government expenditure multiplier is larger than the magnitude of the tax multiplier. C) positive because the magnitude of government expenditure multiplier is smaller than the magnitude of tax multiplier. D) equal to zero. E) negative because the magnitude of the tax multiplier is larger than the magnitude of the government expenditure multiplier.
Suppose the market for pizza makers is initially in equilibrium, but then the equilibrium wage rate and the equilibrium quantity of labor both increased. What happened in the market for pizza makers?
A) The demand for pizza makers increased. B) The demand for pizza makers decreased. C) The supply for pizza makers increased. D) The supply for pizza makers decreased.
Derived demand:
A. is the sum total of all factors of production for a given good or service. B. is only computed for the long-run demand decisions based on short-run marginal changes. C. refers to the demand for variable inputs when at least one fixed input exists. D. refers to the supply decisions of a final good influencing the demand for the inputs needed to make it.
What happens as the result of a shortage?
A. There is downward pressure on prices. B. There is upward pressure on prices. C. Supply of the good decreases. D. Consumers begin to view the good as an inferior good because they have a hard time finding it.