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Scenario 12-4 Suppose That Abdul Opens a Coffee Shop.He Receives a Loan

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Scenario 12-4
Suppose that Abdul opens a coffee shop.He receives a loan from a bank for $100,000.He withdraws $50,000 from his personal savings account.The interest rate on the loan is 8%,and the interest rate on his savings account is 2%.
-Refer to Scenario 12-4.Abdul's implicit cost of capital is


Definitions:

Evenly Split

A division or distribution of something into equal or nearly equal parts.

Invisible Hand

The tendency of competition to cause individuals and firms to unintentionally but quite effectively promote the interests of society even when each individual or firm is only attempting to pursue its own interests.

Ultimatum Game

A game in experimental economics where a proposer offers how to split a sum of money with a responder, who can accept or reject the offer.

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A behavioral economics experiment that tests how individuals behave when they hold all the power over allocating resources.

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