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

Author Question: How might consumers for whom the borrowing constraint is binding benefit from access to relatively ... (Read 14 times)

genevieve1028

  • Hero Member
  • *****
  • Posts: 601
on: Jun 30, 2018
How might consumers for whom the borrowing constraint is binding benefit from access to relatively expensive forms of credit (e.g., pawn shops and payday loans)?
 
  What will be an ideal response?

Question 2

Key determinants of economic profit include ________.
 
  A) the revenue from selling goods and services
  B) the cost incurred in buying capital
  C) the cost of hiring labor
  D) all of the above
  E) none of the above


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

beccamahon

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jun 30, 2018
Answer to Question 1

A binding borrowing constraint means that the marginal rate of substitution is greater than 1 + r. This means that such consumers might pay an interest rate greater than r in order to shift some consumption from the future to the present. So long as (1 + the interest rate they pay) does not exceed the MRS, the utility gained from the increase in current consumption is greater than the utility lost from reduced future consumption.

Answer to Question 2

D


genevieve1028

  • Hero Member
  • *****
  • Posts: 601
Reply #2 on: Jun 30, 2018
Thank you :)


beccamahon

  • Sr. Member
  • ****
  • Posts: 338
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Did you know?

Hyperthyroidism leads to an increased rate of metabolism and affects about 1% of women but only 0.1% of men. For most people, this increased metabolic rate causes the thyroid gland to become enlarged (known as a goiter).

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

As the western states of America were settled, pioneers often had to drink rancid water from ponds and other sources. This often resulted in chronic diarrhea, causing many cases of dehydration and death that could have been avoided if clean water had been available.

Did you know?

There used to be a metric calendar, as well as metric clocks. The metric calendar, or "French Republican Calendar" divided the year into 12 months, but each month was divided into three 10-day weeks. Each day had 10 decimal hours. Each hour had 100 decimal minutes. Due to lack of popularity, the metric clocks and calendars were ended in 1795, three years after they had been first marketed.

Effect of pH on oxygen binding to hemoglobin Effect of pH on oxygen binding to hemoglobin
Language Access Services Language Access Services
Summary of Coordination of Benefit Rules Summary of Coordination of Benefit Rules
Apply direct pressure along upper trapezius, turning the head to access the area. Use your thumb to ... Apply direct pressure along upper trapezius, turning the head to access the area. Use your thumb to ...
Apply deep effleurage to triceps. Position arm with elbow pointing upward to access the triceps ... Apply deep effleurage to triceps. Position arm with elbow pointing upward to access the triceps ...
The Mechanism of Oxygen Binding by Heme Proteins The Mechanism of Oxygen Binding by Heme Proteins
Video: Major Elements in Biological Molecules: Proteins

For a complete list of videos, visit our video library