1. Assume that the market interest rate is 50% (r = 0.50) and that an enterprise...

 

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1. Assume that the market interest rate is 50% (r = 0.50) and that an enterprise has an initial endowment of two units. Assuming the available productive opportunity is as described in the first two columns of the table below, fill in the remainder of the table to determine the outcome for each indicated level of investment. invest output 1 3.75 2 7 3 9.75 4 12 5 13.75 6 15 borrow repay keep a. How much does the enterprise choose to borrow? b. What are the gains-from-trade resulting from the opportunity to borrow? 1. Assume that the market interest rate is 50% (r = 0.50) and that an enterprise has an initial endowment of two units. Assuming the available productive opportunity is as described in the first two columns of the table below, fill in the remainder of the table to determine the outcome for each indicated level of investment. invest output 1 3.75 2 7 3 9.75 4 12 5 13.75 6 15 borrow repay keep a. How much does the enterprise choose to borrow? b. What are the gains-from-trade resulting from the opportunity to borrow?

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Lets fill in the remainder of the table based on the available productive opportunity and the g... View the full answer