Rachel left her job as a graphic artist, where she earned $42,000 per year, to open her own graphic arts firm. Her implicit costs of the new business include:
A. both the expenses incurred for office space, equipment, and supplies and her forgone salary of $42,000 per year.
B. only her forgone salary of $42,000 per year.
C. neither the expenses incurred for office space, equipment, and supplies nor her forgone salary of $42,000 per year.
D. only the expenses incurred for office space, equipment, and supplies.
Answer: B
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A) the U.S. Treasury B) the Federal Reserve C) commercial banks, pension funds, and insurance companies D) government-sponsored mortgage lenders
Improvement in technology in the entire industry or an increase in the education of employees creates a(n):
a. increasing cost industry. b. a downward sloping LRS. c. constant cost industry. d. decreasing cost industry.
In the 1980s and 1990s, American families moved from below to above the poverty line at
a. approximately the same rate as European families b. a higher rate than families in Europe c. a lower rate than families in Europe d. approximately the same rate as Canadian families e. approximately the same rate as Japanese families
Suppose the market equilibrium price of wheat is $5 per bushel, and the government sets a price floor of $7 per bushel to aid growers. What is the most likely result of this action?
a. There will be a shortage of wheat. b. There will be a surplus of wheat. c. There will be an increase in the quantity of wheat demanded as the result of the price floor. d. There will be a decrease in the quantity of wheat supplied as the result of the price floor.