Mr Cog in Problem 7 Has 18 Hours a Day

question 14

Multiple Choice

Mr. Cog in Problem 7 has 18 hours a day to divide between labor and leisure. If he has 17 dollars of nonlabor income per day and gets a wage rate of 13 dollars per hour when he works, his budget equation, expressing combinations of consumption and leisure that he can afford to have, can be written as

• A) R += 329.
• B) 13R + C = 17.
• C) C = 251 + 13R.
• D) 13R + C = 251.
• E) C = 302 + 13R.

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Definitions:

Par

The face value of a bond or other security, at which it can be redeemed at maturity or the amount of money equal in value to a particular share or bond.

Coupon

The yearly payment of interest to those holding bonds, represented as a percentage of the bond's nominal value.

Semi-Annual Coupon

A bond payment made to bondholders twice a year, representing interest on the bond's face value.

Effective Annual Yield

The actual interest rate an investment earns in a year, taking into account the effects of compounding.