Assume You Purchase an Asset That Cost 6000 and Borrow

question 2

Multiple Choice

Assume you purchase an asset that cost 6000 and borrow 40 % of the cost from a wealthy relative. After a year the asset is worth 7800 . What is your rate of return on your investment?

• A)50%
• B)30%
• C)7.5%
• D)60%
• E)5%

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Definitions:

Market Supply

The total quantity of a good or service that producers are willing and able to sell at various prices during a given time period.

Market Demand

is the total amount of a product or service that consumers in a market are willing and able to purchase at different prices, during a certain time period.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is unattainable.

Market Equilibrium

An equilibrium where market demand matches supply, causing price stability.