Your Monthly Payment, C(s, T), on a Car Loan Depends

question 74

Multiple Choice

Your monthly payment, C(s, t) , on a car loan depends on the amount, s, of the loan (in thousands of dollars) , and the time, t, required to pay it back (in months) . What is the meaning of C(6, 24) = 200?

• A)If you borrow $6,000 from the bank for 24 months (2 year loan), your monthly car loan payment is $200.
• B)If you borrow $2,000 from the bank for 24 months (6 year loan), your monthly car loan payment is $200.
• C)If you borrow $200 from the bank for 24 months (2 year loan), your monthly car loan payment is $6.
• D)If you borrow $6 from the bank for 24 months (2 year loan), your monthly car loan payment is $200.

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Definitions:

Externality

A consequence of an economic activity experienced by unrelated third parties; can be either positive or negative.

Neighbors

Individuals or entities located near one another, often used in the context of residential, geographic, or international proximity.

Market Failure

An instance where the free market's distribution of goods and services is inefficient, usually causing a reduction in net social welfare.

Allocate Resources

The process of distributing available resources, such as time, money, and assets, among various projects or business units to maximize efficiency and achieve strategic goals.