Which of the following is an implicit cost? A. The $100,000 the firms pay a person in salary to work as a manager for verizon wireless. B. Paying $1,000 rent to a mall to run a video game business. C. You forgo a $60,000 a year salary working as a manager of plumbing business so you can own your own plumbing business.
1. Which of the following is an implicit cost?
A. The $100,000 the firms pay a person in salary to work as a manager for verizon wireless.
B. Paying $1,000 rent to a mall to run a video game business.
C. You forgo a $60,000 a year salary working as a manager of plumbing business so you can own your own plumbing business.
2. Ralph owns a small pizza restaurant where he works full time in the kitchen. His total revenue is $100,000 a year, and his rent is $36,000 a year. He pays his one employee $24,000 a year, and the cost of ingredients and overhead averages $60,000 a year. Also, Ralph forgoes $35,000 per year as the manager of a competing pizza restaurant nearby. His economic profit for the year was:
A. $34,000
B. $55,000
C, $20,000
D. -$55,000
E. -$20,000
3. If you are charging $100 for skis and you sell 2,000 skis in a year. The explicit costs for the ski business, including insurance, taxes and paying wages to employees, equals $300,000, while the implicit cost of the ski business is the $200,000 job you had forgone being an attorney for the state of Maine. Based on these figures, what is happening here?
A. You are breaking even.
B. You are making a loss.
C. You are making a profit.
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