In introducing the opportunity cost of time into the theory of consumer behavior, we find that, all else equal one should consume less of time-intensive goods.
Opportunity cost of time is actual cost of the time lost in performing one activity instead of another. In other words it is the loss of the time done in choosing an opportunity between the two.
One should consume less time intensive goods because it will save more time.
Theory of consumer behavior is the study of how the people decide to spend their money in the given choices to them according to the budget constraints and individual preferences.
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A stock has an expected return of 12 percent and a beta of 1.16, and the expected return on the market is 11 percent. Here, we are asked to find the risk free rate. We will find it using CAPM formula-
ER= rf+(rm-rf)*beta
12= rf+(0.11-rf)*1.16rf
0.16rf=0.0076
rf=0.0076/0.16
=0.0475
= 4.75%
Therefore, 4.75% will be the risk free rate here.
What is risk free rate?
The risk-free interest rate is the theoretical rate of return on a risk-free investment. As such, it is a benchmark for measuring other investments that include an element of risk. Government bond yields are risk-free interest rates on the most commonly used assets.
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Answer:
A) $5,000
Explanation:
Jermaine and Kesha can claim an American Opportunity (AO) credit for both of their daughters, Devona and Arethia.
Devona's AO credit is $2,500 (100% of the initial $2,000 qualifying expenses and 25% of the next $2,000 qualifying expenses).
Arethia's AO credit is the same as Devona's, $2,500.
The total American Opportunity credit claimed is $5,000 ($2,500 + $2,500)
Answer:
1. a. b. and d.
2. a and c
Explanation:
Stabilizers can aggressively change fluctuations in the business cycle if they are not based on actual facts.
Automatic stabilizers are so called because they act to stabilize economic cycles and are automatically triggered without additional government action.