You Just Won the Lottery and Want to Put Some

question 120

Multiple Choice

You just won the lottery and want to put some money away for your child's college education. College will cost $65,000 in 18 years. You can earn 8% compounded annually. How much do you
Need to invest today?

• A) $9,828.18
• B) $11,763.07
• C) $13,690.82
• D) $15,258.17
• E) $16,266.19

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Definitions:

Marginal Revenue

The additional revenue that a firm earns by selling one more unit of a good or service.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied changes infinitely with any change in price.

Perfect Mobility

An economic condition where factors of production such as labor and capital can be easily moved across industries or geographies without costs or barriers.

Perfect Knowledge

A hypothetical situation in which all parties in the market have complete and absolute information about the market conditions and variables.