A person starts his own business after quitting his job in which he made $75,000. Expenses include $100,000 for wages and salaries, which includes a wage for the owner of $75,000, utilities of $5000, equipment of $50,000, and materials of $40,000
If revenues are $200,000, his accounting and economic profits are respectively A) $80,000 and $5000.
B) -$70,000 and -$70,000.
C) -$70,000 and $5000.
D) $5000 and $5000.
D
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What do taxes do?
(a) Impact the incentive to use resources efficiently (b) Transfer income from the person or entity paying taxes to other individuals or entities (c) Affect the relative prices of goods, services and resources (d) All of the above
Because of crowding out
A) expansionary fiscal policy during a recession must involve a tax increase. B) expansionary fiscal policy during a recession is reinforced by private investment spending. C) the effect of expansionary fiscal policy is partially offset by the decline in investment spending caused by higher interest rates. D) expansionary fiscal policy is completely achieved even with a decline in investment spending.
If a state government finances treatment facilities for alcoholics out of revenues from a tax on liquor, it is
a. basing its taxation on ability to pay b. levying a proportional tax c. able to afford fewer treatment facilities when liquor sales decrease d. discouraging alcoholics from seeking treatment at government facilities e. providing a service that the private sector cannot provide
Explain why the economic analysis of monopolistic competition is so complex
What will be an ideal response?