Economics Homework Eleven Answers - Student Eight

Economics Homework Eleven

Duncan B.

1. When you loan somebody money, you are taking a risk that they may not return it. You want to get a little extra cash in return for the possibility that they will not repay it.

2. You would pay 1,102.5.

3. A bus to Washington D.C. is a fixed cost, because the price of renting a bus does not vary.

5. Interest is compounded annually, therefore at the end of the year you recalculate amounts. To discover the amount paid in the second year, you use the following method: Divide $1000 by 1.1, result $909.09. You divide again, result $826.34.

6. Question #33 is a rather hard question, because you have to look carefully at it. The correct answer is (d) because as the product increases in price, factories produce more, which means hiring more workers.

7. Economic rent is the amount charged above and beyond a good's normal price due to a very limited supply. For example, Dennis Tito, the first space tourist, paid $20 million to spend a few days on the Mir space station, because supply was extremely limited.

8. When output is lowered, the price of goods rises. This is equivalent to price-fixing: it decreases the supply and increases the price per good.

9. I like the concept of the invisible hand: one of mankind's great flaws--greed--is turned for the benefit of society.