Aimee sells hand-embroidered dog apparel over the Internet. Her annual revenue is $128,000 per year, the explicit costs of her business are $42,000, and the opportunity costs of her business are $30,000. What is her economic profit?
A) $12,000 B) $56,000 C) $86,000 D) $98,000
B
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If the required reserve ratio is 10 percent, currency in circulation is $1,200 billion, checkable deposits are $1,600 billion, and excess reserves total $2,500 billion, then the M1 money multiplier is
A) 2.5. B) 1.7. C) 7.3. D) 0.73.
Given the reserve-holding ratio e and the fraction of deposits held as cash c, the money multiplier becomes
A) ec/(e - c). B) (1 + c)/(e + c). C) (1 - c)/ec. D) 1 - e - c. E) ec - (1/c).
With faster inflation, money in the form of ________ becomes more desirable
A) currency B) non-interest-bearing checkable deposits C) interest-bearing checkable deposits D) All of these forms are equally desirable when inflation increases.
What would be the profits for Irene's Dairy in equilibrium?
a. 5 million loss b. 5 million c. 10 million d. 20 million