The sole proprietor of the Milwaukee Machine Company generates an annual accounting profit of $78,000. She has a standing salary offer of $35,000 a year to work for a large corporation. If she had invested her capital outside her own company, she estimates it would have returned $22,000 this year. What is the sole proprietor's economic profit?

A. $0
B. $21,000
C. $13,000
D. $43,000


Answer: B

Economics

You might also like to view...

Which of the following goods is given in the textbook as an example of a good whose price is subject to volume discounts?

A. Electricity B. Pizza C. Gasoline D. Yogurt

Economics

Refer to the data in Figure 22.1. The price of this good

A. Is $1 per unit. B. Is $50 per unit. C. Is $100 per unit. D. Varies as output changes.

Economics

Based on the model of the money market, if the Federal Reserve increases the reserve requirement, the equilibrium interest rate should

A) stay the same. B) increase. C) decrease. D) increase to the same extent that the demand for money increases.

Economics

Why are consumption taxes relevant for measuring the tax wedge?

What will be an ideal response?

Economics