Suppose That a University Decides to Spend $1 Million to Upgrade

question 169

Multiple Choice

Suppose that a university decides to spend $1 million to upgrade personal computers and scientific equipment for faculty rather than spend $1 million to expand parking for students. This example illustrates

• A) distorted priorities.
• B) opportunity costs.
• C) increasing opportunity costs.
• D) productive efficiency.

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Definitions:

Semiannual Receipt

Payments or incomes that are received twice a year.

Accrued Interest

The amount of interest that has been incurred but not yet paid over a particular period.

Government Bonds

Debt securities issued by a government to support government spending, which investors can purchase, typically considered low-risk investments.

Accrued Interest

The accumulated interest on a note payable or receivable that has been earned but not yet received or paid out.