Ben quit his job as an economics professor to become a golf professional. He gave up his salary ($40,000) and invested his retirement fund of $50,000 (which was earning 10 percent interest) in this venture. After all expenses, his net winnings (profit) were $45,000. Ben’s economic profits were
A. $45,000.
B. $5,000.
C. $2,000.
D. zero.
Answer: D
You might also like to view...
In comparing monopoly to a perfectly competitive market, which of the following is false?
A) Market price will be higher under monopoly. B) Equilibrium quantity will be higher under perfect competition. C) Consumers will be worse off with the monopoly. D) Employment will be higher under monopoly.
Natural monopolies are of theoretical, but not practical interest
a. True b. False Indicate whether the statement is true or false
An individual has an absolute advantage in producing pizzas if that individual:
A. has a higher opportunity cost of producing pizzas than anyone else. B. has a lower opportunity cost of producing pizzas than anyone else. C. charges the lowest price for pizzas. D. can produce more pizzas in a given amount of time than anyone else.
A local video store estimates its average customer's demand per year is Q = 20 ? 4P, and it knows the marginal cost of each rental is $1.00. How much should the store charge for an annual membership in order to extract the entire consumer surplus via an optimal two-part pricing strategy?
A. $40 B. $64 C. $32 D. $20