Author Question: Suppose Bob leaves his 50,000-a-year job as a financial advisor to P.E.T.S. and starts his own ... (Read 57 times)

ts19998 · **on:** Jun 30, 2018

Suppose Bob leaves his 50,000-a-year job as a financial advisor to P.E.T.S. and starts his own business selling spot remover for Dalmatians. In the first year his accounting profit is 70,000 . Based on this level of success, Bob should
a. return to his old job because his economic profit is negative
b. return to his old job because his economic profit is smaller than his accounting profit
c. return to his old job because his economic profit is less than his old salary
d. stay with his new firm because his economic profit is positive
e. stay with his new firm because accounting profit is positive

Question 2

Suppose a soccer coach has been making 25,000 per year but gives up his coaching job in order to make lace doilies. If his revenue from the sale of these doilies is 50,000 and his materials cost 20,000 . then his economic profit is
a. 5,000
b. 25,000
c. 30,000
d. 50,000
e. 80,000