The economy's current rate of interest is 10 percent and a firm has $100,000 of owner-invested capital. Its total revenue is $50,000 and the firm's explicit costs are $30,000. From this we know that this firm's
A. economic profit is -$10,000.
B. accounting profit is -$500.
C. economic profit is $10,000.
D. accounting profit is $50,000.
Answer: C
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Which of the following is a sustained decrease in the price level?
a. hyperinflation b. disinflation c. deflation d. none of the above are considered a sustained decrease in the price level.
According to the traditional Keynesian approach, if the government raises taxes, then
A. real Gross Domestic Product (GDP) will rise but the price level will fall. B. real Gross Domestic Product (GDP) will remain constant but the price level will fall. C. both real Gross Domestic Product (GDP) and the price level will falle. D. real Gross Domestic Product (GDP) will fall and the price level will remain constant.
Which of the following statements is true?
A. A person who buys a bond always pays the face value for the bond. B. If a corporation issues a bond and Dennis buys it, Dennis becomes one of the owners of the corporation. C. A stockholder of Firm X is one of the owners of Firm X. D. The owner of the bond receives periodic payments equal to its coupon rate times the price he paid for the bond.
A bank which must hold 100 percent reserves opens in an economy that had no banks and a currency of $150 . If customers deposit $50 into the bank, what is the value of the money supply?
a. $50 b. $100 c. $150 d. $200