Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of $25,000 and $30,000 and withdrew $20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed $20,000 from his brother, whom he pays 2 percent interest per year. He spent $15,000 to purchase supplies and earned $50,000 in revenue during his
first year. Which of the following statements is correct?
a. Sebastian's economic profit is $4,000 . and his accounting profit is $34,600 .
b. Sebastian's economic profit is $4,600, and his accounting profit is $35,000.
c. Sebastian's economic profit is -$16,000 . and his accounting profit is $34,600.
d. Sebastian's economic profit is -$16,000 . and his accounting profit is $14,600.
a
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Which of the following firms is most likely to have a constant marginal cost?
A) A firm that is a price taker B) A firm that has extremely high fixed costs C) A firm that has extremely high variable costs D) A firm that faces a horizontal demand curve
The typical age-earnings cycle shows that
A) there is a positive relationship between age and earnings that eventually turns into a negative relationship. B) there is a constant positive relationship between age and earnings. C) there is a constant negative relationship between age and earnings. D) there is no relationship between age and earnings.
The "free-rider problem" of public goods refers to:
a. individuals' refusal to pay taxes. b. individuals' attempts to hide their preferences for collective goods and to avoid paying for them. c. individuals' over-use of collective goods. d. the inelasticity of individuals' demands for public goods.
If adding one more lag of the dependent variable would explain the dependent variable better, then the model is not dynamically complete.
Answer the following statement true (T) or false (F)