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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