Figure 2.4 -Joe Runs a Business and Needs to Decide How Many

question 117

Multiple Choice

Figure 2.4
-Joe runs a business and needs to decide how many hours to stay open.Figure 2.4 illustrates his marginal benefit of staying open for each additional hour.Suppose that we observe Joe staying open 5 hours per day.If he is following the marginal principle,what must his marginal cost be?

• A) $16
• B) $24
• C) $32
• D) $40

---

Definitions:

Appraised Value

The estimated value of a property, as determined by a qualified professional appraiser.

Property Taxes

Taxes levied by local governments based on the value of property owned, such as land and buildings.

Compound Annual Rate

The rate of return that would be required for an investment to grow from its beginning balance to its ending one, compounding over a period of a year.

Compounded Annually

Describes the calculation of interest on an investment whereby the interest earned each year is added to the principal sum, leading to interest being earned on interest from the subsequent year onwards.