Suppose that the economy is made up of a single firm, which pays $300 in interest payments, pays $300 in its labour costs, and pays $2,000 in rental costs for its building. The rest of its revenues are paid out to the owners of this firm. This firm also produces $10,000 of its final product, selling $7,000 to domestic consumers, keeping $2,000 to replenish its inventories, and selling the rest abroad. In this little economy, using the Income Approach, what is the total amount of Business Profits? Note: Round your answers to two decimal places.

Suppose that the economy is made up of a single firm, which pays $300 in interest payments, pays $300 in its labour costs, and pays $2,000 in rental costs for its building. The rest of its revenues are paid out to the owners of this firm. This firm also produces $10,000 of its final product, selling $7,000 to domestic consumers, keeping $2,000 to replenish its inventories, and selling the rest abroad. In this little economy, using the Income Approach, what is the total amount of Business Profits? Note: Round your answers to two decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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