Select one or more: Oa Marco can reach point J by borrowing against his future income O b. Borrowers are always worse off than lenders O. Investing all his endowment and simultaneously borrowing is Marco's best option O d. At point J Marco's marginal rate of substitution is 1.1 O e. At point H, Marco has an mrs of 0.8 O f. The diagram shows that borrowing against returns on future investment is always rational, if the bank will lend you the money. O g. If Marco cannot borrow and cannot invest a rise in the interest rate makes him better off. If he can invest and borrow a rise in the interest makes him worse off O h. If Marco can invest and borrow he will choose to borrow $136.36, the present value of $150

Select one or more: Oa Marco can reach point J by borrowing against his future income O b. Borrowers are always worse off than lenders O. Investing all his endowment and simultaneously borrowing is Marco's best option O d. At point J Marco's marginal rate of substitution is 1.1 O e. At point H, Marco has an mrs of 0.8 O f. The diagram shows that borrowing against returns on future investment is always rational, if the bank will lend you the money. O g. If Marco cannot borrow and cannot invest a rise in the interest rate makes him better off. If he can invest and borrow a rise in the interest makes him worse off O h. If Marco can invest and borrow he will choose to borrow $136.36, the present value of $150

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 4.8P

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