Refer to Scenario 9.7 below to answer the question(s) that follow. SCENARIO 9.7: Julio borrowed $80,000 from his great aunt to open a coffee stand at a local flea market. He agrees to pay his great aunt a 5% yearly return on the money she lent him. His other yearly fixed costs equal $16,000. His variable costs equal $60,000. He sold 50,000 cups of coffee during the year at a price of $3.00 per cup.Refer to Scenario 9.7. Julio's total costs equal
A. $20,000.
B. $40,000.
C. $60,000.
D. $80,000.
Answer: D
You might also like to view...
Because of diminishing returns to capital, there is a limit to the increases in average labor productivity that can be gained from additional or improved ________.
A. entrepreneurship B. physical capital C. availability of land and natural resources D. imports
Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?
A) at 0 gallons B) at 10 gallons C) at 40 gallons D) at 60 gallons
Explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlor
a. The payment he makes to buy tattoo ink. b. The wages he pays his employees. c. The $500-per-month payment he makes to advertise his shop on highway billboards. d. The lease payment he makes to the landlord who owns the building where his shop is located. e. The payment he makes on his liability insurance policy.
Refer to the information in Scenario 8.1. If Fizzle and Sizzle sell the same output at the same price and are otherwise identical, Fizzle's profit will be
A) higher than Sizzle's by $500,000 yearly. B) higher than Sizzle's by just less than $500,000 yearly. C) zero in the long run, and Sizzle will be out of business. D) the same as Sizzle's, because Fizzle must be assigned an implicit cost of $500,000 yearly for economic rent. E) the same as Sizzle's, because Sizzle will move to a more advantageous location in order to compete.