Economics Homework Eleven Answers - Student Five

TrishM

1. If I were to loan out money to someone, I would want them to pay me interest because loaning out money is just offering another service. If I were offering the service of washing someone's car, I would expect them to pay for my time and effort. This is the same idea when loaning out money. It is a service and although I would not be contributing much, if any, effort, I would still be contributing the time that I did not have that money, and, therefore, I should be payed for it.

Excellent. Note spelling: "paid for it," not "payed for it."

2. $1,000 x 1.05 = $1,050 ----- $1,050 x another 1.05 = $1,102.50 So, I would pay you $1,102.50 to satisfy the debt.

Correct!

3. The bus trip to D.C. would be a variable cost. A variable cost is a cost that can be changed in the short run. It is not a fixed cost because fixed costs cannot be changed in the short run.

Superb.

4. I think that the concept of Interest in economics is one of the best self-motivators. To work up and save up enough money to start investing and gain more money through the accumulation of interest, can truly motivate someone to be a hard worker.

Excellent.

5. $1,000 = (110% times X) times 110%, so, 1,000 divided by 110% = $909.09, $909.09 divided by another 110% = $826.45, which is the amount that I will have to pay you today.

Correct! (I don't why I mis-graded this the first time.)

6. I'll pass this question.

OK!

Terrific work. 50/50. Perfect!--Andy Schlafly 22:21, 6 December 2009 (EST)