Refer to the information below. The economic profits of Harvey's firm in the first year were:
Harvey quit his job at State University where he earned $45,000 a year. He figures his entrepreneurial talent or foregone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building.
A. $155,000
B. $160,000
C. $220,000
D. $280,000
B. $160,000
You might also like to view...
The curve formed by plotting the value of the marginal product for workers against quantity of labor is:
A. downward sloping. B. upward sloping. C. perfectly elastic, for competitive firms. D. perfectly inelastic.
During 1929-1933, monetary policy was
a. highly expansionary and this led to an increase in the general level of prices. b. characterized by steady monetary growth, which resulted in price stability. c. characterized by a sharp reduction in the supply of money, which led to downward pressure on prices and a decline in output. d. highly expansionary and this led to a reduction in the general level of prices.
When looking at a graph of nominal and real interest rates you notice the graph for nominal rates and the graph for real rates cross each other many times. From this you conclude
a. consumer prices sometimes rose and sometimes fell in the time frame represented on the graph. b. consumer prices were always rising in the time frame represented on the graph. c. the economy never experienced a recession in the time frame represented on the graph. d. GDP was always increasing for the time frame represented on the graph.
Most of the public debt is owed to citizens and domestic institutions. This is one reason that the public debt:
A. has a procyclical economic effect on the economy. B. can result in the bankruptcy of the federal government. C. crowds out private investment. D. does not impose a burden on future generations.