Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an
airplane for $6,000 . pays $1,300 for fuel and maintenance, and hires one worker for $30,000 . Sam's total revenue from pilot training classes equaled $90,400 . Sam's implicit costs for this year are equal to
a. $84,400
b. $39,000
c. $55,000
d. $45,600
e. $40,000
D
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What does the equilibrium of supply and demand in a market do?
a) It maximizes the prices at which producers are willing to sell. b) It minimizes the prices that consumers are willing to pay. c) It produces both an efficient and equitable market outcome. d) It maximizes the total benefits received by buyers and sellers.
Investment spending at any level of national income is the investment producers
a. actually make b. expected to make c. expect to make d. make net of actual investment e. intend to make