Which of the Following Decisions Is Not Financially Sound

question 35

Multiple Choice

Which of the following decisions is not financially sound?

• A) Defer your student loan payments with no interest accruing
• B) Defer your student loan payments if the interest rate is 7% per annum
• C) Take a 60-month zero interest rate car loan
• D) Prioritize paying off the highest interest rate loans versus lower rate loan

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Definitions:

Consumer Surplus Loss

The reduction in consumer surplus due to changes in market conditions such as price increases or decreases in available goods.

Individual Seller

A single entity or person engaged in the act of selling goods or services, typically on a small scale or directly to consumers.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, due to higher market price.

Individual Producer Surplus

The net gain to an individual seller from selling a good; equal to the difference between the price received and the seller’s cost.