Mike Wants to Open His Own Repair Shop,and Is Considering

question 81

Multiple Choice

Mike wants to open his own repair shop,and is considering using his savings of $30,000 to get it started.He is currently earning 3 percent interest on his savings.His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money.If Mike were to use the money to open his own repair shop,how can he accurately account for his costs?

• A) Mike must consider the $900 in forgone interest on his savings as an implicit cost.
• B) Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost.
• C) Mike must consider the $900 in forgone interest on his savings as an explicit cost.
• D) Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost.

---

Definitions:

Censoring Dissent

The act of suppressing opinions that are contrary to those of the majority or in power, often seen in political, social, or cultural contexts.

Group Polarization

The phenomenon where the attitude of a group becomes more extreme than the initial attitude of its members following group discussions.

Outgroups

Groups of people not belonging to the main or dominant group, often perceived as different or outside the main group.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members, often observed following group discussions.