Billie Jean Has $120 to Spend and Wants to Buy

question 64

Multiple Choice

Billie Jean has $120 to spend and wants to buy either a new amplifier for her guitar or a new mp3 player to listen to music while working out.Both the amplifier and the mp3 player cost $120,so she can only buy one.This illustrates the basic concept that

• A)trade can make everyone better off.
• B)people face trade-offs.
• C)rational people think at the margin.
• D)decisions made at the margin are not particularly important.

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Definitions:

Note Payable

A written promise to pay a specific amount of money, with or without interest, at a future date.

Total Liabilities

The sum of all financial obligations a company owes to external parties, including long-term and short-term liabilities.

Note Payable

A written promise to pay a specific amount of money, usually with interest, at a future date.

Interest Incurred

The cost of borrowing money, represented as the amount charged by a lender to a borrower for the use of assets, typically expressed as an annual percentage of the principal.