Homework Help Forum: Economics

Posted by John on Thursday, September 3, 2009 at 10:50am.

During a year of operation, a firm collects $450,000 in revenue and spends $100,000 on labor expense, raw materials, rent, and utilities. The firm's owner has provided $750,000 of her own money instead of investing the money and earning a 10% annual rate of return. What is the explicit opportunity cost of using market-supplied resources? A. $100,000 B. $750,000 C. $75,000 D. $175,000 Using the same facts as Question 1: What is the total economic cost? A. $100,000 B. $750,000 C. $175,000 D. $75,000 Using the same facts as Question 1: What is the firm's economic profit? A. $450,000 B. $275,000 C. $300,000 D. $350,000 Using the same facts as Question 1: What is the firm's accounting profit? A. $300,000 B. $350,000 C. $275,000 D. $0 Using the same facts as Question 1, except assume the owner could earn 15% annually on the money she has invested in the firm: What is the economic profit of the firm? (When revenue is $450,000) A. $0 B. $350,000 C. $237,500 D. $75,000

• Economics - Anonymous, Tuesday, September 8, 2009 at 10:23am

  a, a, a, a, a

  
  

• Economics - Anonymous, Thursday, September 10, 2009 at 6:55pm

  b, b, b, b, b

  
  

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