The Bow Wow company produced and sold 400 dog beds. The average cost of production per dog bed was $40. Each dog bed can be sold for a price of $75. Bow Wow's total costs are
A. $17,500.
B. $16,000.
C. $30,000.
D. $46,000.
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Tiana sells 275 candy bars at $0.50 each. Her total costs are $125. Her profits are
A. $12.50.
B. $124.50.
C. $125.00.
D. $137.50.
Kelly has decided to start his own business giving sailing lessons. To purchase equipment for the business, Kelly withdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from the bank at an interest rate of 7%. What is Kelly's annual opportunity cost of the financial capital that has been invested in the business?
A. $30
B. $140
C. $170
D. $300
Which of the following is an example of an implicit cost?
A. Interest paid on the firm's debt
B. Rent paid by the firm to lease office space
C. The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
D. Wages paid to workers
Bev is opening her own court-reporting business. She financed the business by withdrawing money from her personal savings account. When she closed the account, the bank representative mentioned that she would have earned $300 in interest next year. If Bev hadn't opened her own business, she would have earned a salary of $25,000. In her first year, Bev's revenues were $30,000, and she spent $1,000 on materials and supplies. Which of the following statements is correct?
A. Bev's total explicit costs are $26,300.
Bev's total implicit costs are $300.
C. Bev's accounting profits exceed her economic profits by $300.
D. Bev's economic profit is $3,700.