Question.5172 - Instead of being employed at a printing company at a salary of $25,000 per year.Sally starts her own printing firm. Rather than renting a building that she owns to someone else for $10,000 per year, she uses it as the location for her company.Her costs for workers, materials, advertising, and energy during her first year are $125,000.If the total revenue from her printing company is $155,000, her total economic profit is A. -$5,000 B. $5,000 C. $20,000 D. $30,000 E. $120,000 2. An entrepreneur has earned enough total revenue to cover her economic costs. What must be true? (A) Her accounting costs are larger than her economic costs. (B) Her accounting profits are less than her implicit costs. (C) Her explicit costs are equal to her implicit costs. (D) Her implicit costs are less than her total fixed costs. (E) Her accounting profits are positive. 2. All of the following statements are correct EXCEPT: (A). Economic profit equals total revenue minus total cost, including both explicit and implicit costs. (B). Accounting profit equals total revenue minus total cost, including both explicit and implicit costs. (C). Explicit costs are actual payments made to outsiders for resources used in production. (D). Implicit costs are the opportunity costs of using resources owned by the firm. (E). Normal profit is earned when economic profit equals zero.
Answer Below:
1) Question 1 asks for economic profit. Economic profit is calculated as:Economic Profit =Total Revenue − (Explicit Costs + Implicit Costs)If:Total Re...
Question xxxx for xxxxxxxx profit xxxxxxxx profit xx calculated xx Economic xxxxxx Total xxxxxxx Explicit xxxxx Implicit xxxxx If xxxxx Revenue xxxxxxxx Costs xxxxxxx materials xxxxxxxxxxx energy xxxxxxxx Costs xxxxxxxxxxx Cost xx Salary xxx could xxxx earned xxxx salary xxxxxxxxx Opportunity xxxx of xxxxxxxx she xxxxx have xxxxxx it xxx Total xxxxxxxx Costs xxxxxxxx Profit x Economic xxxxx include xxxx explicit xxx implicit xxxxx If xxx producer xxx earned xxxxxx total xxxxxxx to xxxxx the xxxxxxxx cost xxxx Economic xxxxxx Since xxxxxxxx profit xx zero xxx accounting xxxxxx which xx Accounting xxxxxx Total xxxxxxx Explicit xxxxx must xx positive xxxxxxx it xxxx not xxxxxxxx implicit xxxxx So xxxxxx is xxx Q xx E xxx accounting xxxxxxx are xxxxxxxx For xxxxxxxx where xx need xx find xxx statement xxxx is xxx correct xxxxxx D x Accounting xxxxxx is xxxxxxxx when xxx total xxxxxxx is xxxx than xxx sum xx explicit xxxxx and xxxxxxxx costs xx Incorrect xxxxxxx accounting xxxxxx does xxx include xxxxxxxx costs xxxxxxxxxx profit xxxx considers xxxxxxxx costs xx it xxxxx still xx positive xxxx when xxxxxxxx profit xx negative
.ico)
.ico)
.ico)
