You Borrow $10,000 at an Interest Rate of 5% to Open

question 45

Multiple Choice

You borrow $10,000 at an interest rate of 5% to open Movies Galore, a DVD rental store. You will earn an economic profit if the return on your investment is

• A) between 0 and 5%.
• B) 5%.
• C) greater than 5%.
• D) only greater than 10%.

Grasp the concept of market responses to policy changes and global events.

Apply knowledge of supply and demand to predict market outcomes for housing.

Recognize the effect of changing consumer preferences on market demand.

Understand the relationship between shifts in supply and demand curves and their impact on equilibrium price and quantity.

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Definitions:

MPS

The marginal propensity to save, indicating the proportion of additional income that a household saves rather than spends on consumer goods.

C

In economic formulas, "C" typically represents consumption spending by households.

Consumers

Individuals or households that purchase goods and services for personal use.

Services

Intangible products such as healthcare, education, and financial advising that are consumed at the point of delivery and do not result in ownership of physical goods.