Ch11_12_part2_Practice_Problems

What is johns annual opportunity cost of the

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Unformatted text preview: ing business. To purchase the mowers and the trailer to transport the mowers, John withdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from the bank at an interest rate of 7%. What is John's annual opportunity cost of the financial capital that has been invested in the business? a. $30 b. $140 c. $170 d. $300 5.Pete owns a shoe- shine business. His accountant most likely includes which of the following costs on his financial statements? (i) shoe polish (ii) rent on the shoe stand (iii) wages Pete could earn delivering newspapers (iv) interest that Pete’s money was earning before he spent his savings to set up the shoe- shine business a. (i) only b. (i) and (ii) only c. (iii) and (iv) on...
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This document was uploaded on 04/06/2014 for the course ECON 1 at UCLA.

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