Which of the Following Statements Regarding a 30-Year Monthly Payment

question 7

Multiple Choice

Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 8% is CORRECT?

• A) exactly 8% of the first monthly payment represents interest.
• B) the monthly payments will decline over time.
• C) a smaller proportion of the last monthly payment will be interest, and a larger proportion will be principal, than for the first monthly payment.
• D) the total dollar amount of principal being paid off each month gets smaller as the loan approaches maturity.
• E) the amount representing interest in the first payment would be higher if the nominal interest rate were 6% rather than 8%.

Identify the conditions under which producing more or less of a good benefits society.

Grasp the significance of voluntary exchange and its impact on societal welfare.

Comprehend the principles of perfect competition and its implications for efficiency in production and resource allocation.

Recognize the role of marginal cost and consumer surplus in determining the efficient production and consumption of goods.

---

Definitions:

Elastic

Describes a situation in economics where the demand or supply for a good or service significantly changes in response to a change in price.

Perfectly Inelastic

A situation in market demand or supply where the quantity demanded or supplied does not change regardless of changes in price.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a state of balance in the market.

Equilibrium Quantity

The amount of goods or services supplied that is exactly equal to the amount of goods or services demanded at a particular price level.