Julie owns a store that sells previously-owned video games. Last year, Julie generated $250,000 in total revenues. Her explicit costs were $175,000, which included wages paid to her employees and payments made to her and suppliers. Last year Julie also received an offer of $75,000 per year to manage a retail outlet of a chain-store competitor. Based on this information:
accounting profit = $0; economic profit = −$75,000.
accounting profit = $175,000; economic profit = $75,000.
accounting profit = $75,000; economic profit = $0.
accounting profit = $25,000; economic profit = $100,000.
accounting profit = $75,000; economic profit = −$100,000.
Accounting profit = total revenue - explicit costs
= 250000-175000
= 75000
Economic profit = accounting profit - implicit costs
= 75000-75000
= 0
option(C)
Julie owns a store that sells previously-owned video games. Last year, Julie generated $250,000 in total revenues. Her e...
Leona owns her own business and works full time in the store without paying herself a salary. She has $20,000 of her own money invested in the store that she withdrew from her savings account, which earned 10 percent interest. She was offered a job last year making $28,000 per year, but turned it down. If Leona's accounting statements show revenues of $100,000 and accounting costs of $60,000, then Leona's A. accounting profit is $20,000, and her economic profit is...
1. Ralph owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month. Ralph could earn $35,000 per year as the manager of a competing pizza restaurant nearby. His total explicit costs for the year were a. $24,000. b. $66,000. c. $72,000. d. $60,000. e. $6,000....