Peregrine Consumes ($700, $880)and Earns ($600, $990)

question 47

Multiple Choice

Peregrine consumes ($700, $880) and earns ($600, $990) .If the interest rate is 0.10, the present value of his endowment is

• A)$1,590.
• B)$1,500.
• C)$1,580.
• D)$3,150.
• E)$3,750.

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Definitions:

Quantity Demanded

The complete volume of a good or service that individuals intend to acquire at a predetermined price within a set period.

Shortage

A situation in which the demand for a good or service exceeds its supply in a market.

Surplus

An excess of income or assets over expenditure or liabilities in a given period, indicating financial health.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product or service, typically used to control costs for essential items like food and rent.