Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner/manager does not choose to pay himself, but he could receive income of $90,000 by working elsewhere. The firm earns revenues of $360,000 per year. What are the annual implicit costs for the firm described above?
A. $160,000.
B. $360,000.
C. $90,000.
D. $450,000.
Answer: C
You might also like to view...
Which of the following characterizes a perfectly competitive market?
A) The market demand curve is vertical. B) The demand for each individual firm's product is perfectly elastic. C) Each firm sets a different price. D) Each firm produces a product slightly different from that of its competitors.
What is the distinction between the price of capital equipment and the rental rate of capital?
What will be an ideal response?
Based on the data in the above table, then if opportunity costs are constant, the opportunity cost of producing one cuckoo clock in the United States is ________, and the opportunity cost of producing one cuckoo clock in Switzerland is ________
A) 3 movies; 1.33 cuckoo clocks B) 0.33 movies; 0.67 cuckoo clocks C) 0.67 movie; 1.5 movies D) 1.5 movies; 0.67 movie
If the price of a good decreases, the resulting increase in the quantity purchased decreases the marginal utility of the good
a. True b. False Indicate whether the statement is true or false