Economics

Can someone help me with this question I am lost.

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I’m genuinely serious, this is due in a few hours

If the cost of traveling to the second trader is 5 shkalim

it's a trick question retard, Babylon hasn't existed for thousands of years

how can you be indifferent when the greedy goyim are trying to sell you a blanket for 20 (TWENTY ?!!) shekels ?
It's literally anudah shoah and you should subvert and destroy their society as payback for their disgusting greed.

I hated being a TA for ECON 101, you’re all retards.

>Inflation
>Opportunity cost

When you can earn 25% interest over a year. Then you can make the 5 shekels investing the 20. But honestly the question is retarded. I’m gonna need more than equal return to be indifferent if I’ve got to take the effort to invest.

what is a shekel worth?

LMAO THANK YOU GUYS these replies are actually helpful!

go get em champ, proud of you

When your need outweighs your buying power, it makes sense to delay payment at a higher cost for an item received now.

you would be indifferent if real interest rates were 25%

Not going to spoon feed you. Look up the present value of money formula

Indifferent to what? This is an actual question or a larp you put in word?

What a dumb question. Is that from that faggy babylon book? Cant imagine a professor would ask a question like that.

Did whoever make this mean the solution to be:
To be indifferent, you would need to have some idea about the underlying time discount function. If the individual is indifferent between having 20 $ now and 25 dollars later?

If you can make a risk-free yearly return of 25% on your 20 shekels.

For context, this is from a textbook chapter talked about ancient currencies and civilizations

This but combined with the effect of inflation of the shekel.

>babylon
under hammurabi, assyrians, persians, neo-babylon or alexander the great?

neo-babylon period you could leverage assets for free based on your reputation and run your own "bank" for your own market, they also had something resembling mortgages/loans but for trade routes.
>pay small upfront for goods
>get free goods that are needed in kingdom X
>leave your goods that are in high demand in babylon at the market
>go trade
>every time you return from your trade route you pay back your market boss for the original purchase of goods
>if you didn't sell enough to pay back they confiscated the goods you left at the market as collateral.

This is important because it made trading more liquid and the rug you bought in babylon could got for 10x 5x somewhere else you would not be indifferent even if there was 25% inflation etc.

You could take the 20 shekel rug and sell it for 100 shekels up north in less then a year.

you should go to the other one if you can at least double 5 shekels within a year.

just hire a nigger to kill both merchants for 5 shekels but never pay him and then pay another nigger 1 shekel to kill the first nigger. then rat out the second nigger as a murderer and collect the reward

Excellent idea