If You Have a Choice of Receiving a Cash Payment

question 21

Multiple Choice

If you have a choice of receiving a cash payment of $5 today:

• A) you are indifferent to receiving $5.07 next year if your opportunity cost is 7%.
• B) you are indifferent to receiving $5.00 next year if your opportunity cost is 7%.
• C) you are indifferent to receiving $5.35 next year if your opportunity cost is 10%.
• D) you are indifferent to receiving $5.35 next year if your opportunity cost is 7%.
• E) you are indifferent to receiving $5.10 next year if your opportunity cost is 10%.

---

Definitions:

Marginal Benefits

The additional benefits received from consuming one more unit of a good or service.

Marginal Costs

The increase or decrease in the total cost that arises when the quantity produced is incremented by one unit.

Complementary Resources

Assets or inputs that, when used together, enhance the productivity or effectiveness compared to using each separately.

Native-born Workers

Employees who were born in the country where they are working, as opposed to immigrant or foreign workers.