Fred is considering opening a ski shop in Colorado. Assume Fred will incur the following costs: building rent = $100,000/year, inventory = $250,000/year, energy = $50,000/year, and labor (one clerk) = $10,000/year
In addition, Fred's current income as a computer programmer is $40,000 per year. Assuming Fred would earn $460,000 in revenues, he could expect to earn: A) an accounting profit of $10,000 per year.
B) an accounting profit of $60,000 per year.
C) an economic profit of $10,000 per year.
D) an economic profit of $50,000 per year.
C
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Which of the following increases the supply of gasoline?
A) a situation where the quantity of gasoline demanded exceeds the quantity supplied B) an increase in the price of gasoline C) a decrease in the price of a resource used to produce gasoline, such as crude oil D) a decrease in the demand for gas-guzzling, sport utility vehicles E) an increase in income if gas-guzzling, sport utility vehicles are a normal good
In the above figure, if the market produces the efficient amount of purses, then consumer surplus equals triangle
A) abc. B) bcd. C) adc. D) cgf.