Suppose Ernie gives up his job as financial advisor for P.E.T.S., ...

[jho37]

Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned 30,000 per year, to open up a store selling spot remover to Dalmatians. He invested 10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the new business were 50,000 . and explicit costs were 10,000 . Calculate Ernie's economic profit.
 a. 10,000
  b. 50,000
  c. 20,000
  d. 40,000
  e. 9,500

Question 2

Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned 30,000 per year, to open up a store selling spot remover to Dalmatians. He invested 10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the new business were 50,000 . and explicit costs were 10,000 . Calculate Ernie's accounting profit.
 a. 10,000
  b. 50,000
  c. 20,000
  d. 40,000
  e. 9,500

[mk6555]

Answer to Question 1

E

Answer to Question 2

D