Suppose That Chloe Opens a Dog Grooming Business in a Local

question 53

Multiple Choice

Suppose that Chloe opens a dog grooming business in a local shopping center. Which of the following would be an example of a factor of production used by Chloe?
(i) her employees' time
(ii) brushes, combs, scissors, and clippers
(iii) shampoo, water, and flea prevention treatments
(iv) Chloe's time spent on bookkeeping and bill paying

• A)(i) only
• B)(i) and (ii) only
• C)(i), (ii), and (iii) only
• D)(i), (ii), (iii), and (iv)

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Definitions:

Prepaid Interest

Interest starts accruing (building) at the beginning of each month and continues throughout the month; prepaid interest at the closing is the amount of mortgage interest due to cover the time from the closing date to when the first mortgage payment is due.

Down Payment

The upfront money applied to a purchase that is made using a loan (credit).

Mortgage

A loan specifically used to purchase real estate, where the property itself serves as collateral until the loan is repaid.

Closing Costs

Costs that are paid at closing that include origination fees, attorney fees, points, prepaid interest, transfer tax, and title insurance.