A Deposit Placed in an Interest-Earning Account Earning 8% a Year

question 11

Multiple Choice

A deposit placed in an interest-earning account earning 8% a year will double in value in ___ years.

• A) 6
• B) 8
• C) 9
• D) 72
• E) It will never double in value

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Definitions:

Profit-Maximizing Level

The output level at which a firm achieves the highest possible profit, where marginal cost equals marginal revenue.

Competitive Firm

A business entity in a market where it must take the prevailing market price as given, due to its inability to influence prices through its own actions.

Market Price

The present cost at which a product or service is available for purchase or sale in the market.

Economic Profit

The difference between a firm's total revenue and its opportunity costs, including both explicit and implicit costs.