Inayah needs Rs.100, 000 to start an ice-cream business. If she uses Rs.40, 000 from her savings and another Rs.60, 000 borrows from the bank. The interest rate is 5% in the market. Find the opportunity cost that Inayah has to bear in order to start a business?

Inayah needs Rs.100, 000 to start an ice-cream business. If she uses Rs.40, 000 from her savings and another Rs.60, 000 borrows from the bank. The interest rate is 5% in the market. Find the opportunity cost that Inayah has to bear in order to start a business?

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section: Chapter Questions

Problem 3TY: Emily buys an air conditioner that costs $700. Because the air in her home is cleaner, its use saves...

See similar textbooks

Related questions

Q: discuss and analyze a current event in economics.

A: Economics is the study of the scarcity of resources and unlimited wants. The unlimited wants can be…

Q: Elroy Harris is considering whether to buy a corn and soybean farm in Iowa. The farm will cost…

A: Accounting profit is the net income from a business, which is revenue minus explicit costs. Economic…

Q: In Economics LRP means Group of answer choices a. firms can change some factors of production…

A: Long run production(LRP): - long run is the time period where all of the production factors can be…

Q: “It is better to pay a regular price than to stand in a long line for a free item.” Discuss the…

A: The term economics is originated from the GREEK word OIKONOMIA meaning the management and study of…

Q: The company that you manage has invested $5 million in developing a new product, but the development…

A: You should not go ahead. The reason is, you will receive greater loss. That is, if you go ahead, the…

Q: The company that you manage has invested $5 million in developing a new product, but the development…

A: given information is that, i have invested 5 million already and now the expected sales of new…

Q: The opportunity cost of receiving RM10 in the future as opposed to getting that RM10 today is…

A: Meaning of Opportunity Cost: The term opportunity cost refers to the situation under which the…

Q: Firms Households Markets for Factors of Production

A: Household is the supplier of factor of production, i.e., labor and capital Firm is the buyer of…

Q: Will giving children/students money help improve their interest in Economics and increase their…

A: When talking about the study of economics and finance, it can be said that a student learns a…

Q: Make a simple statement (Which do you think among the 3 ethical theories fits in a business…

A: Ethics of Utilitarianism Utilitarianism, the first ethical paradigm in normative ethics, is commonly…

Q: Consider the market for loanable fund. Answer the question below. 2.a. The market equilibrium…

A: Please find the answer below.

Q: Rs.100, 000 to start an ice-cream business. If she uses Rs.40, 000 from her savings and another…

A: The opportunity cost of economic activity is the value of the next best alternate action forgone in…

Q: An increase of 50 per cent in the cost of a certain consumable product raises the cost of living of…

A: The consumer price index (CPI) is used to measure the weighted basket of goods and services that a…

Q: Which of the following attributes is most closely associated with a necessity entrepreneur? A.…

A: An entity or organization that is being engaged in activities including professional, commercial, or…

Q: Based on the law of economics, is an invitation to go to the movies as a birthday gift, considered…

A: In economics, the second principle says "the economic cost of something is what you give up to get…

Q: A family of four has an income of $15,000 today and will earn $24,000 tomorrow. If the family…

A: Introduction Here total income of two period = $15,000 + $24,000 = $39,000 Consumption of the family…

Q: Please use the graph to answer the given questions. Assume the people act rationally. Which of…

Q: If 50 customers are all willing to pay $30 for an album that sells for $25, how much total value is…

A: Introduction: Revenue is the money made by a company's work. Revenue can be calculated in a number…

Q: in a capitalist market economy, the decision to save is made by the same people who make the major…

A: The capitalist market is the market that is run by private individuals or business own capital…

Q: Which of the below statements DOES NOT capture what Charles Wheelan has expressed in chapter 6…

A: The summary of chapter 6 Productivity and Human Capital of Naked Economics is as follows : Human…

Q: Which statement explains how people working in their own self-interest produce goods, services, and…

Q: Kate has just finished high school and is considering what to do next. She has narrowed down her…

A: Present Discounted Value refers to the value of a series of cash flows at regular intervals or the…

Q: Explain the advantages of Islamic economics

A: The core concepts of Islamic economics are taken from the Holy Quran, and are backed up by hadith…

Q: Four factors of Production

A: Microeconomics studies the economic behavior of individual units such as a firm, a market, a…

Q: Assume that a firm is considering building a factory that will cost $5 million. It believes that it…

A: The information we have is:- Beginning venture = $5 million Yearly income = $600,000 Pace of…

Q: Optimizing economic agents use the real interest rate when thinking about the economic costs and…

Q: Does maximizing the value of the firm come at the cost of the CSR program? When forming your…

A: The major aim of any organization is making a profit.

Q: Bread is always a consumer goods True/False

A: A good being produced by a business and being bought by a consumer as a final good is known as…

Q: how unreflective consumption of goods - in this case, sugar - affect your journey towards the good…

A: How unreflective consumption of goods - in this case, sugar - affect your journey towards the good…

Q: You are choosing between buying a home or continuing to rent. You value the home at $1,000,000 (one…

A: Answer: The buyer values the house at $1,000,0000. So, Willingness to pay = $1,000,000 Cost of house…

Q: Inayah needs Rs.100, 000 to start an ice-cream business. If she uses Rs.40, 000 from her savings and…

A: If she takes the loan of 60,000 and the interest rate is 5%, then she has to pay back is…

Q: 1. This is a tax levied on gifts and is imposed on the gratuitous transfer of property between two…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Assume that you have inherited a perpetual bond that pays $2000 annually. a. If you accepted $60,000…

A: *SOLUTION :-

Q: Which of the following would lead to an increase in an individual's wealth? i. a person makes the…

A: Net worth is the difference between the value of what you tend to own including house, checking…

Q: If the budget line rotates from blue to red. Consumption Next Year B Consumption Today The interest…

A: since you have asked multiple questions and according to policy we can solve only 1 question and for…

Q: Can you give me two pros and cons about cashless economy? Also, I need some backgroud information.

A: A cashless economy is one in which online payments such as net banking, mobile banking, digital…

Q: world is gradually turning into a cashless world. To what extent will a cashless lifestyle…

A: Yes. Many of the economies are turning towards digital cash. This solves majority of the problems…

Q: In order to increase economic activity, a city proposes to allow diesel-powered delivery vehicles to…

A: The National Park Service oversees 84 million sections of land spread across 397 public parks, 40…

Q: Potatoes cost Janice $1 per pound, and she has $5.00 that she could possibly spend on potatoes or…

A: Cost refers to the sum of cash a corporation invests on making or producing products or services.

Q: What is the maximum amount you would pay for an asset that generates an income of P150,000 at the…

A: Opportunity cost of money is the amount of dollars that an individual will forgo by choosing to hold…

Q: Q2. Can good news for farming be bad news for farmers? Imagine you are a farmer in Kanpur. You earn…

A: Productivity of a product depends on the raw material and technology used in its production. If the…

Q: Many clothing stores purchased new fashions from clothing manufacturers back in the Fall, expecting…

A: Here the main concept is inventory management and scope of inventory because if the retailers keep…

Q: Select the correct answer. Which of these is a major effect of innovation? A. job creation B.…

A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…

Q: Aisha is opening a bicycle shop, and her monthly expenditures to get the shop up and running exceed…

A: The income and the expenditures are the two main components of the households or business. The…

Q: What is the maximum amount you would pay for an asset that generates an income of $250,000 at the…

A: The measure that depicts value of current income stream being discounted at specified rate of return…

Q: The capital earns an interest return on investment in the structure of production because A.…

Question

Inayah needs Rs.100, 000 to start an ice-cream business. If she uses Rs.40, 000 from her savings and another Rs.60, 000 borrows from the bank. The interest rate is 5% in the market. Find the opportunity cost that Inayah has to bear in order to start a business?

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Emily buys an air conditioner that costs $700. Because the air in her home is cleaner, its use saves her $250 in curtain cleaning costs over the lifetime of the air conditioner. In money terms, what is the opportunity cost of the air conditioner?
Inayah needs Rs.100, 000 to start an ice-cream business. If she uses Rs.40, 000 from her savings and another Rs.60, 000 borrows from the bank. The interest rate is 5% in the market. Find the opportunity cost that Inayah has to bear in order to start a busines
Your group won $100 from a Tiktok dance challenge. You have a choice between spending the money now and putting it away for a year in a bank account that pays 5 percent interest. What is the opportunity cost of spending the $100 now? (support your answer with computations and discussion)
Four factors of Production
Give 5 benefits of why frugality is important
Meaning of economic
You have one scarce hour to spend between studying for an examination or taking classes in a tutorial for Rs. 200 per hour. You choose to study for examination. What is the opportunity cost of studying?
Which of the following are systematic errors? a. A colorblind person who repeatedly runs red lights. b. An accountant whose occasional math errors are sometimes on the high side and sometimes on the low side. c. The tendency many people have to see faces in clouds. d. Miranda paying good money for a nice-looking apple that turns out to be rotten inside. e. Elvis always wanting to save more but then spending his whole paycheck, month after month.
how unreflective consumption of goods - in this case, sugar - affect your journey towards the good life
Explains every points