Suppose the Most You Would Be Willing to Pay for a Plane

question 94

Multiple Choice

Suppose the most you would be willing to pay for a plane ticket home is $250. If you buy one for $175, then your economic surplus is:

• A)$250.
• B)$175.
• C)$75.
• D)$0.

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Definitions:

Annual Interest Rate

The annual interest rate is the percentage charged on a loan or paid on an investment for a one-year period, representing the cost of borrowing or the earnings from an investment.

Net Savings

The amount left after subtracting a person's or organization's total expenses from their total income, often accumulated over time.

Discount Period

The time frame between the beginning of a loan or credit term and the date the full payment is due, during which a discount may be offered for early payment.