Ron regularly deposits $200 each week into a savings account, which earns 3% interest per year. This month he decides instead to invest $200 into the stock market. What is the opportunity cost of Ron's decision to invest rather than save?
A) $200
B) The 3% interest he could have earned by depositing another $200 into his savings account
C) The difference between the rate of return he enjoys in the stock market and the 3% interest return he could have earned by depositing that $200 into his savings account
D) Zero, because Ron already had the $200
B
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The figure above represents the competitive market for slices of key lime pie. When the price is $3, the total producer surplus equals
A) $0. B) $60. C) $90. D) $120. E) None of the above answers is correct.
Private saving is defined as
A) private disposable income minus consumption. B) net national product minus consumption. C) private disposable income minus consumption plus interest. D) private disposable income minus consumption plus interest plus transfer payments.