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You Are Considering Applying for One of Two Credit Cards

question 36

Essay

You are considering applying for one of two credit cards.Credit card "A" has an annual fee of $30 and charges interest of 10 percent.Credit card "B" has no annual fee,but charges an interest rate of 15 percent.If you carry an average balance of $500 on your credit card,the lowest total annual expenses you could have with one of these two credit cards would be:
(a)$50
(b)$80
(c)$75
(d)$90


Definitions:

New Product

A new product is an item or service that has been recently developed or significantly improved, offering new features or benefits to the market.

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming an additional unit of a good or service.

Product Z

A hypothetical product used in discussions or examples when no specific product is being referenced.

Consumer's Income

The total amount of income available to an individual or household for spending on goods and services.

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