Helga owns Viking, Inc., started with her $100,000 inheritance. Helga’s accountant informs her that her firm earned a profit of $100,000 last year, and that if she chooses to invest the money she can expect a 10 percent return. If Helga did not run Viking, she would not work. What were Helga’s economic profits last year?
A. Zero
B. $100,000
C. $90,000
D. $95,000
Answer: C
You might also like to view...
An economist claims that any point not on a production possibilities frontier cannot be best. What is his reasoning to support this?
A. A point inside the frontier implies that society is not facing up to the problem of scarcity. B. A point inside the frontier limits growth, and growth is always a goal worth pursuing. C. A point inside the frontier represents inflation, and inflation is a dangerous situation. D. A point inside the frontier results in fewer goods, and more is always better. E. A point inside the frontier is inefficient and represents wasted resources.
Refer to the figure above. The equilibrium quantity of dollars traded is:
A) 100 dollars. B) 300 dollars. C) 650 dollars. D) 50 dollars.
Your text mentions several ways that international trade flows are qualitatively different than they were a century ago. Which of the following is NOT one of those ways?
A) Manufactured goods are more important than the were in the past. B) Firms' investment spending on capital goods is more important than in the past. C) International trade in raw commodities and agricultural products is more important than it was in the past. D) It is possible to trade some types of services in a way that was not possible in the past. E) Multinational corporations play a bigger role in production than they did in the past.
Suppose that the City of Arcata, California, imposes rent control so that rents cannot exceed $500 per month on one bedroom rental units. Suppose that $500 had also been the equilibrium rental price in Arcata before a huge new apartment complex was built in the nearby town of McKinleyville, where rents are $400 per month. Which of the following is most likely to be true?
a. There will be a lasting surplus of rental housing in Arcata after the new apartment complex is built in McKinleyville. b. There will be a shortage of rental housing in Arcata at the rent-control price of $500. c. The equilibrium rental price in Arcata will fall below $500, and thus rent control will not affect the rental market in Arcata. d. The equilibrium price of $500 per month in Arcata will not change.