A farmer with $1000 worth of crops in the field faces a .10 probability that a hail storm will destroy the value of her crop before she can harvest it. If she is risk averse, the most she would be willing to pay to insure against this loss is

Which of the following is true?

A) Accounting profits = Revenues - Implicit costs - Explicit costs B) Economic profits = Revenues - Explicit costs C) Accounting profits = Revenues - Implicit costs D) Economic profits = Accounting profits - Implicit costs

Jake sells Star Wars memorabilia on eBay. His annual revenue is $42,000 per year, and the explicit costs of his business are $10,000. What is his accounting profit?

A) $10,000 B) $22,000 C) $32,000 D) $42,000