This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Lucinda is deciding whether to enroll in an art school or a culinary school. The art school will ... (Read 96 times)

torybrooks

  • Hero Member
  • *****
  • Posts: 500
on: Jun 29, 2018
Lucinda is deciding whether to enroll in an art school or a culinary school. The art school will cost 38,000 and the culinary school will cost 52,000.
 
  Lucinda estimates that the benefits from attending the art school will be 75,000 and the benefits from attending the culinary school will be 88,000. Based on these numbers, in which school should Lucinda enroll?

Question 2

When the Fed lowers the federal funds rate and the real interest rate falls, what happens to the opportunity cost of investment? What happens to investment?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Mochi

  • Sr. Member
  • ****
  • Posts: 300
Reply #1 on: Jun 29, 2018
Answer to Question 1

The net benefit from attending the art school is 75,000 - 38,000 = 37,000. The net benefit from attending the culinary school is 88,000 - 52,000 = 36,000. So, even though the total benefit is greater from attending the culinary school, the net benefit is greater from attending the art school, so she should attend the art school.

Answer to Question 2

The opportunity cost of investment is the real interest rate. When the Fed lowers the federal rate so that the real interest rate falls, the opportunity cost of investment decreases. In response, investment increases.


torybrooks

  • Member
  • Posts: 500
Reply 2 on: Jun 29, 2018
Wow, this really help

Mochi

  • Member
  • Posts: 300
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

In 1885, the Lloyd Manufacturing Company of Albany, New York, promoted and sold "Cocaine Toothache Drops" at 15 cents per bottle! In 1914, the Harrison Narcotic Act brought the sale and distribution of this drug under federal control.

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Raphael, The School of Athens. Raphael, The School of Athens.
School of Kano, Namban six-panel screen. School of Kano, Namban six-panel screen.
School aged chess player School aged chess player
High school science classes are required to use deductive logic High school science classes are required to use deductive logic
Family interactive style predicts academic achievement in high school Family interactive style predicts academic achievement in high school
Kindergarten school year book Kindergarten school year book
Video: Normal and abnormal blood pH

For a complete list of videos, visit our video library