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Semmy [17]
3 years ago
6

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?
Business
1 answer:
Lelu [443]3 years ago
4 0

Answer: 5% of RS 100,000

Explanation:

Opportunity cost is what an economic agent such as an individual, form or government forgoes when a choice is made from different available choices.

Here, since Inaya has used Rs100000 for her ice cream business, the opportunity cost will be the 5% interest that she could have made on the money used for the business

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In the 2-factor, 2-good Heckscher-Ohlin model, the country with a relative abundance of labour will have a production possibility frontier that is biased toward production of the labour intensive good

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