Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30,000 per year, to open up a store selling spot remover to Dalmatians. He invested $10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the new business were $50,000 . and explicit costs were $10,000 . Calculate Ernie's accounting profit
a. $10,000
b. $50,000
c. $20,000
d. $40,000
e. $9,500
D
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A) government failure. B) government as usual. C) lack of government trust. D) politics.
For goods and services that are perfect substitutes, the consumer's indifference curves are ________ lines
A) straight, negatively sloped B) L-shaped C) negatively sloped, bowed-outward D) negatively sloped, bowed-inward
Into what two effects can we divide the effect of a price change?
What will be an ideal response?
When the economy is hit by a negative demand shock and the central bank pursues policies to increase aggregate demand to its initial level, then
A) inflation will be lower. B) output will be at its potential. C) output will be lower. D) inflation will be unchanged. E) both B and D.