Suppose a Firm Has an Annual Budget of $200,000 in Wages

question 27

Multiple Choice

Suppose a firm has an annual budget of $200,000 in wages and salaries,$75,000 in materials,$30,000 in new equipment,$20,000 in rented property,and $35,000 in interest costs on capital.The owner/manager does not choose to pay himself,but he could receive income of $90,000 by working elsewhere.The firm earns revenues of $360,000 per year. What are the annual implicit costs for the firm described above?

• A)$450,000.
• B)$160,000.
• C)$90,000.

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Definitions:

Hub-Piloted

A type of wheel mounting system on vehicles where the hub centers the wheel and bears the weight, improving alignment and stability.

Truck Disc Wheels

Wheels made for trucks that feature a flat disc design, commonly constructed from steel or aluminum, providing support for the tire.

Alignment Problems

Issues affecting a vehicle’s wheel alignment, which can lead to uneven tire wear, steering difficulties, and reduced fuel efficiency.

Wheel Bearings

Wheel bearings are mechanical assemblies that support the rotation of a vehicle's wheels, reducing friction and ensuring smooth motion.