# Economics

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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 -

a, a, a, a, a

• Economics -

b, b, b, b, b

• Economics -

C,C,C,C,C

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