Refer to the diagram below. Cheri's budget line shifts inward from CD to AB. Which statement below is consistent with this shift?
A. Both prices double, while her income also doubles
B. Both prices increase by 20 percent, while her income increases by 15 percent
C. Both prices decrease by 10 percent, while her income falls by 15 percent
D. Both prices decrease by 10 percent, while her income falls by 6 percent
C. Both prices decrease by 10 percent, while her income falls by 15 percent
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Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000 . Korie currently has $500,000 in the bank earning 3 percent interest per year. If Korie purchases the factory with her own money, what is the annual implicit opportunity cost of purchasing the factory?
a. $0 b. $3,000 c. $12,000 d. $15,000
Which of the following constitutes an external cost of driving an automobile?
A. insurance B. pollution C. license D. fuel