Refer to Scenario 7.5 below to answer the question(s) that follow.SCENARIO 7.5: You own and are the only employee of a company that customizes bicycles. Last year your total revenue was $60,000. Your costs for rent and supplies were $25,000. To start this business you invested an amount of your own capital that could pay you a $45,000 a year return.Refer to Scenario 7.5. Your economic profit last year was
A. -$20,000.
B. -$10,000.
C. $15,000.
D. $35,000.
Answer: B
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The production possibilities curve for guns and butter in both Canada and the U.S. are straight lines. Suppose for Canada, the opportunity cost of producing butter is 1/2 gun. What must the opportunity cost of producing butter in the U.S. be if it specializes in guns and Canada specializes in butter?
a. more than 2 b. 2 c. 1/2 d. less than 1/2 e. more than 1/2
Bonnie volunteers to help make floral arrangements at a flower shop. She is an example of
A. human capital. B. labor. C. entrepreneurial ability. D. physical capital.
The success of a cartel rests upon
A. making exit from the cartel as nearly costless as possible. B. inducing all members to differentiate their products and charge different prices. C. inducing all members to limit their combined output and charge the same price. D. discouraging some firms in the market from joining.
A ________ occurs when government spending exceeds tax revenue
A) budget deficit B) negative externality C) consumer surplus D) positive externality