Suppose you quit your job, which paid you $50,000 per year, so that you could start your own business. In the first year you received $160,000 in total revenue and spent $40,000 on employee wages, $20,000 on supplies, $40,000 on rent and $5,000 to the government for taxes. You also used $20,000 from your personal savings to buy equipment for your business, which was earning 5 percent interest each year. At the end of the year, the market price for the equipment was $18,000. Given only this information, what is your economic profit? O $7,000 O-$18,000 O $55,000 $2,000 O $52,000

Suppose you quit your job, which paid you $50,000 per year, so that you could start your own business. In the first year you received $160,000 in total revenue and spent $40,000 on employee wages, $20,000 on supplies, $40,000 on rent and $5,000 to the government for taxes. You also used $20,000 from your personal savings to buy equipment for your business, which was earning 5 percent interest each year. At the end of the year, the market price for the equipment was $18,000. Given only this information, what is your economic profit? O $7,000 O-$18,000 O $55,000 $2,000 O $52,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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