Suppose a lawyer leaves his $50,000-a-year job and starts his own firm breeding pit bulls. In the first year, his accounting profit is $70,000 . The lawyer finances his new business with $100,000 from his savings account, which had earned 10 percent interest. His economic profit is
a. $10,000
b. $60,000
c. $70,000
d. -$80,000
e. -$90,000
A
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Recall the Application. By the end of the last phase of quantitative easing in late 2014, that value of the Fed's assets was
A) $1 trillion. B) $2 trillion. C) $3 trillion. D) $4.5 trillion.
If net interest and net transfers are zero, and a country's exports exceed its imports, the country definitely has ________
A) a current account surplus B) a current account deficit C) a capital and financial account surplus D) an official settlements account surplus
If goods are complements, then their
A) cross elasticities are positive. B) income elasticities are positive. C) income elasticities are negative. D) cross elasticities are negative.
The demand for money curve
A) shows the relationship between money demanded and open market operations. B) shows the relationship between the quantity of money balances demanded and the interest rate. C) is positively related to the interest rate. D) varies inversely with the supply of money.