The Table Below Provides the Annual Revenues and Costs for a Family-

question 81

Multiple Choice

The table below provides the annual revenues and costs for a family- owned firm producing catered meals. $\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 500000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { wages and salaries } & 200000 \\\hline \text { risk-free return of } 6 \% \text { on owners' capital of } 250000 & 15000 \\\hline \text { rent } & 105000 \\\hline \text { depreciation of capital equipment } & 25000 \\\hline \text { risk premium of } 8 \% \text { on owners' capital of } 250000 & 20000 \\\hline \text { intermediate inputs } & 150000 \\\hline \text { forgone wages of owners in alternative employment } & 80000 \\\hline \text { interest on bank loan } & 10000 \\\hline\end{array}$ TABLE 7- 1
-Refer to Table 7- 1.To an accountant,this family- owned catering company is earning .To an economist,the same firm is earning _ .

• A)zero profit; normal profits
• B)positive profits; economic losses
• C)economic profits; economic profits
• D)economic profits; economic losses
• E)zero profit; economic losses

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Definitions:

Reasonably Safe Conditions

Conditions that do not present a significant risk of harm to individuals and are maintained according to accepted standards of safety.

Agency Contract

A legal agreement where one party, the agent, acts on behalf of another party, the principal, in business transactions.

More Than One Year

Typically refers to obligations or assets that have a life or duration longer than one year from the current date.

Agency Terminates

The conclusion or end of an agency relationship between a principal and agent, which can occur through mutual agreement, completion of the task, or by other legal means.