Suppose an assistant professor of economics is earning a salary of $75,000 per year. One day she quits her job, withdraws $80,000 from a bank certificate of deposit (CD) that had been earning percent per year, and uses the funds to open a bookstore. At the end of the year, she shows an accounting profit of $95,000 on her income tax return. What is her economic profit? Her economic profit for the year is?
Suppose an assistant professor of economics is earning a salary of $75,000 per year. One day she quits her job, withdraws $80,000 from a bank certificate of deposit (CD) that had been earning percent per year, and uses the funds to open a bookstore. At the end of the year, she shows an accounting profit of $95,000 on her income tax return. What is her economic profit? Her economic profit for the year is?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 39P: A firm is considering an investment that will earn a 6 rate of return. If it were to borrow the...
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