Refer to Scenario 9.2 below to answer the question(s) that follow. SCENARIO 9.2: Tom borrowed $40,000 from his parents to open a donut stand. He agrees to pay his parents a 5% yearly return on the money they lent him. His other yearly fixed costs equal $10,000. His variable costs equal $25,000. He sold 40,000 dozen donuts during the year at a price of $2.00 per dozen.Refer to Scenario 9.2. Tom's profit is
A. $0.
B. $26,000.
C. $30,000.
D. $43,000.
Answer: D
You might also like to view...
How do adverse selection and moral hazard affect the market for insurance?
What will be an ideal response?
Answer the following statements true (T) or false (F)
1. In a mature industry, all firms operate with constant returns to scale. 2. On a cost/output graph, the average fixed cost is constructed as a straight horizontal line. 3. Marginal cost crosses the average variable cost and the average total cost at their lowest points. 4. The average fixed cost remains constant even in the long run. 5. Marginal cost is related inversely to the marginal product.
To be counted in the labor force
A) a person has to be working at least 40 hours per week. B) a person has to be at least 16 or older, have a job, or if unemployed has to be actively seeking employment. C) a person, irrespective of his or her age, has to be working or, if out of work, actively seeking employment. D) a person has to be over 16 years of age, irrespective of whether she or he is actively seeking work.
If income doubles and the prices of all goods remain the same, the budget line will shift outward by 50 percent along each axis
a. True b. False