Ally owns a shoe store. The market wage is $10 per hour, and the cost of capital is $2 per week for every $1000, of capital borrowed. Consider the isocost line associated with spending $8000, per week, and let the y-axis be the amount of capital borrowed in increments of $1000. Which of the following is not true?
A) If Ally borrows no capital, she can employ 800 hours of work.
B) If Ally employs no workers, she can borrow $4 million of capital.
C) If Ally employs 600 hours of work, she can borrow $1 million of capital.
D) If Ally employs 400 hours of work, she can borrow $3 million of capital.
E) The slope of the isocost line is −5.

Question

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The Answer of Ally owns a shoe store. The market wage is $10 per hour, and the cost of capital is $2 per week for every $1000, of capital borrowed. Consider the isocost line associated with spending $8000, per week, and let the y-axis be the amount of capital borrowed in increments of $1000. Which of the following is not true?
A) If Ally borrows no capital, she can employ 800 hours of work.
B) If Ally employs no workers, she can borrow $4 million of capital.
C) If Ally employs 600 hours of work, she can borrow $1 million of capital.
D) If Ally employs 400 hours of work, she can borrow $3 million of capital.
E) The slope of the isocost line is −5.

Ally Owns a Shoe Store