Albie Operates an Illegal Drug­running Business and Has the Following

question 106

Essay

Albie operates an illegal drug­running business and has the following items of income and expense. What is Albie's adjusted gross income from this operation?
$\begin{array}{lr}\text { Income }&\$800,000\\\text { Expenses: }\\\text { Rent } & 24,000 \\\text { Utilities } & 9,000 \\\text { Bribes to police } & 55,000 \\\text { Medical expense } & 5,000 \\\text { Legal fees } & 25,000 \\\text { Depreciation } & 30,000 \\\text { Illegal kickbacks } & 30,000 \\\text { Cost of goods sold } & 300,000\end{array}$

---

Definitions:

Factor Endowments

Refers to the quantity and quality of resources a country or region has available, such as labor, land, and capital.

Heckscher-Ohlin Theorem

An economic theory stating that countries export what they can most efficiently and abundantly produce.

Labor Intensive

describes industries or production processes that require a large amount of labor relative to capital in the production process.

WTO

The World Trade Organization, an intergovernmental organization that regulates international trade agreements and disputes between nations.