Refer to Scenario 7.2 below to answer the question(s) that follow. SCENARIO 7.2: You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. Refer to Scenario 7.2. Your accounting profit last year was
A. $10,000.
B. $30,000.
C. $50,000.
D. $60,000.
Answer: C
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The presence of price controls in a market usually is an indication that
a. an insufficient quantity of a good or service was being produced in that market to meet the public's need. b. the usual forces of supply and demand were not able to establish an equilibrium price in that market. c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers. d. policymakers correctly believed that, in that market, price controls would generate no inequities of their own.
A rightward shift in aggregate demand will cause an increase in output and price level if aggregate supply is
A. Downward-sloping to the right. B. Upward-sloping to the right. C. Horizontal. D. Vertical.
Cuba is a command economy that suffered a decline in economic growth because of a cut in the aid provided by the former Soviet Union when the latter collapsed. As a consequence, Cuba:
A. Experienced an outward shift of its production possibilities curve B. Experienced an inward shift of its production possibilities curve C. Moved from one point to another along its existing production possibilities curve D. Went to a point inside its production possibilities curve
At a price of $10, the marginal revenue of a monopolist is $6. If the marginal cost of production is $8, what should the monopolist do in order to maximize profits?
A. Increase its price. B. Decrease its price. C. Keep its price at the same level. D. There is not enough information to solve.