Malcolm Has a Down Payment of $45 000 on a House

question 86

True/False

Malcolm has a down payment of $45 000 on a house valued at $200 000.He might be better off to borrow an additional $5000 on a personal loan to avoid the high ratio insurance premium.

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Definitions:

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion.

Business-stealing Externality

A situation where a new entrant in a market captures a portion of the incumbent firms' customers, causing economic losses to existing businesses.

Product-variety Externality

An economic effect where the variety of products available in the market impacts the welfare of consumers, often positively.

Efficient Scale

The level of production at which average total costs are minimized, indicating the most cost-effective scale of operation.