Answer to Question #52913 in Microeconomics for Yana

Question #52913
1. An economist left her BAM 100,000 - a - year teaching position to work full - time in her own consulting business. In the first year, she had total revenue of BAM 200,000 and business expenses of BAM 100,000. She made a(n): a. economic profit. b. economic loss. c. implicit profit. d. accounting loss but not an economic loss. e. zero economic profit. 2. Which of the following statements is true ? a. Economic profit equals accounting profit minus implicit costs. b. The short run is any period of time in which there is at least one fixed input. c. A fixed input is any resource for which the quantity cannot change during the period under consideration. d. In the long run there are no fixed costs. e. All of these.
1
Expert's answer
2015-06-12T00:00:41-0400
1. An economist left her BAM 100,000 - a - year teaching position to work full - time in her own consulting business. In the first year, she had total revenue of BAM 200,000 and business expenses of BAM 100,000. She made a zero economic profit, because if we include implicit costs of 100,000 salary of a teacher, then economic profit = 200,000 - 100,000 - 100,000 = 0.
So, the right answer is:
e. zero economic profit.
2. All statements are true, so the right answer is:
e. All of these. 

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