3. Assume you have $5,000 burning a hole in your pocket, so you decide to invest it into something You narrow your options down to two: Bitcoin Your high school friend's business While watching a podcast where Joe Rogan promises you a return of 300% yearly in bitcoin, your old high school friend messages you on Facebook, asking you to invest in her new business, with a vague promise of being your own boss, a flashy car, and a 5% return over the next year. The current interest rate accrued on the $5,000 is 1%. Assuming all these returns to be true (and ignoring the benefits/disadvantages of being your own boss and the flashy car), how would you optimally invest your money? b. What is the opportunity cost of your decision? (Dollar amount) What is the economic profit of your decision? (Dollar amount) C.
3. Assume you have $5,000 burning a hole in your pocket, so you decide to invest it into something You narrow your options down to two: Bitcoin Your high school friend's business While watching a podcast where Joe Rogan promises you a return of 300% yearly in bitcoin, your old high school friend messages you on Facebook, asking you to invest in her new business, with a vague promise of being your own boss, a flashy car, and a 5% return over the next year. The current interest rate accrued on the $5,000 is 1%. Assuming all these returns to be true (and ignoring the benefits/disadvantages of being your own boss and the flashy car), how would you optimally invest your money? b. What is the opportunity cost of your decision? (Dollar amount) What is the economic profit of your decision? (Dollar amount) C.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:3.
Assume you have $5,000 burning a hole in your pocket, so you decide to
invest it into something. You narrow your options down to two:
Bitcoin
Your high school friend's business
While watching a podcast where Joe Rogan promises you a return of 300% yearly in
bitcoin, your old high school friend messages you on Facebook, asking you to invest
in her new business, with a vague promise of being your own boss, a flashy car, and a
5% return over the next year. The current interest rate accrued on the $5,000 is 1%.
a.
Assuming all these returns to be true (and ignoring the
benefits/disadvantages of being your own boss and the flashy car), how would you
optimally invest your money?
b.
What is the opportunity cost of your decision? (Dollar amount)
What is the economic profit of your decision? (Dollar amount)
C.
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