Question

D Question 8 1 pts Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120.000 and the total explicit cost is $60,000. Jim does not want to reveal how much own-savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer not to start his own business. 8. Refer to Case 2. The savings Jim uses to start his business is $ 400.000 300,000 500,000 1.200.000 Question 9 Refer to Case 2. Which of the following is most accurate about Jim's business? If the interest rate increases, its accounting profit decreases If the interest rate decreases, its economic profit will rise. Its economic profit equals its accounting profit if the Interest rate is zero. All above are correct.

Answer 1

Solution Case 2 ram his jab,forom which he and then usch hu oun sauing $40,000 easning he only the fioestea Jim 30uce pen his oaapital do tasut Sevenue is 120, 000 and the to tal explicit cost is $60.000 does not want to oreveal haw much own sauing h tn his ousines but implies dhat if the indeond sate highe than s he oould nefer not do slart his oun busines form. In new Jim uses was efer to Case 2 The Jousin es i $ 300,0o6 Jim wses o atat his saving ophion B 300,000is cosorect asnr Herce Refer to case 2 Which of the fallotolng is most about Jimis siness accosrate Hence aphon D' A Cosrcel is p1ght answer