When Determining How Much of a Vehicle You Can Afford

question 63

Multiple Choice

When determining how much of a vehicle you can afford, what is a valid option?

• A) Withdraw the money directly from savings and pay cash for the car.
• B) Use a combination of cash for a down payment and borrow the remainder with a loan.
• C) Borrow the entire purchase price of the car with a loan.
• D) All of these answer choices are correct.

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Definitions:

Marginal Product

The additional output that is produced as a result of utilizing one more unit of a variable input, holding other inputs constant.

Equilibrium Quantity

The level of goods or services offered and demanded at the price of equilibrium.

Labor

The effort involving both mental and physical capacities of humans utilized in creating goods and services.

Marginal Productivity Theory

A principle in economics that states the compensation of a factor of production, like labor, depends on the marginal productivity of that factor.