Which of the following statements is true?
a. Economic profits ignore implicit costs.
b. Economic profits include implicit costs.
c. Accounting profits include all of the opportunity costs.
d. Economists consider sunk costs in their decision making.
QUESTION 2James used 250,000 from his savings account that paid an annual interest of 15 to purchase a hardware store. After one year, James sold the business for 320,000 . What is his economic profit?
a. 320,000
b. 70,000
c. 282,500
d. 32,500
QUESTION 3Scott used 4,000,000 from his savings account that paid an annual interest of 5 to purchase a hardware store. After one year, Scott sold the business for 4,100,000 . His economic profits is:
a. 300,000
b. 100,000
c. -100,000
d. -200,000
QUESTION 4Scott used 4,000,000 from his savings account that paid an annual interest of 5 and a 60,000 loan at an annual interest rate of 5 to purchase a hardware store. After one year, Scott sold the business for 4,100,000 . His economic profits is:
a. 300,000
b. 100,000
c. 97000
d. None. He runs an economic loss of 103,000
QUESTION 5Scott used 4,000,000 from his savings account that paid an annual interest of 5 and a 60,000 loan at an annual interest rate of 5 to purchase a hardware store. After one year, Scott sold the business for 4,100,000 . His accounting profits is:
a. 300,000
b. 100,000
c. 97,000
d. 20,000
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