Author Question: Suppose a consumer is torn between buying a Chevy Tahoe or a Ford Expedition, each selling for ... (Read 64 times)

folubunmi · **on:** Jun 29, 2018

Suppose a consumer is torn between buying a Chevy Tahoe or a Ford Expedition, each selling for 30,000. He eventually decides on the Tahoe. What's his opportunity cost?

A) 30,000
B) 30,000 plus taxes, tags, insurance, etc.
C) The satisfaction he would have experienced owning the Ford Expedition
D) The frustration he will face owning the Chevy Tahoe
E) B, C, and D above.

Question 2

The real interest rate charged on a loan is the

A) prime rate.
B) prime rate plus the risk premium.
C) the rate charged minus the costs of supplying credit.
D) the rate charged minus the expected rate of inflation.