Aimee sells hand-embroidered dog apparel over the Internet. Her annual revenue is $128,000 per year, the explicit costs of her business are $42,000, and the opportunity costs of her business are $30,000. What is her economic profit?
A) $12,000
B) $56,000
C) $86,000
D) $98,000
Answer: B
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At a firm's break-even point, its
A) total revenue equals its total opportunity cost. B) marginal revenue exceeds its marginal cost. C) marginal revenue equals its average variable cost. D) marginal revenue equals its average fixed cost.
An example of a policy aimed at economic development that would also indirectly impact poverty would be:
A. food stamps. B. earned income tax credit. C. public investments in education. D. All of these will cause economic growth and positively impact poverty.
Why wasn't the stimulus passed in 2009 effective in reducing unemployment during the recession of 2009-10?
A) Congress cut the size of the final package, it was skewed toward tax cuts, and it was only 25% of the amount needed to restore GDP to full employment. B) The administration mismanaged it—and it was much too large. C) Fiscal policy is ineffective in a liquidity trap. D) Tax cuts and interest rate cuts would have been effective, but they were politically undesirable.
If the long-run market supply curve is perfectly elastic, a fall in demand will cause the final equilibrium to be at:
A. the same price and the same output. B. a lower price and a lower output. C. a lower price but the same output. D. the same price but a lower output.