With a Budget of $200 Million,the Government Can Choose to Purchase

question 72

Multiple Choice

With a budget of $200 million,the government can choose to purchase 4 helicopters or repair 200 km of highway. FIGURE 1-1
-Refer to Figure 1-1.For the government,the opportunity cost of one search and rescue helicopter is

• A)0 kilometres of highway repair.
• B)50 kilometres of highway repair.
• C)100 kilometres of highway repair.
• D)150 kilometres of highway repair.
• E)200 kilometres of highway repair.

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Definitions:

Real Rate of Return

The rate of profit or growth rate after adjusting for inflation.

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real rate, which is adjusted for inflation.

Inflation

How quickly the average price of goods and services elevates, lessening the power to purchase.

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment, which includes all fees and costs associated with the transaction.