When You Use Your Own Savings to Start a Business

question 196

Multiple Choice

When you use your own savings to start a business, you make a profit

• A) after the first dollar you earn, because you borrowed no funds to start the business.
• B) after you earn an amount equal to the savings you used to start the business.
• C) only after you cover the opportunity cost of using your savings to start your business.
• D) only after you earn double the amount of money you invested.

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Definitions:

Households

Units consisting of one or more people living in the same dwelling and sharing meals or living accommodation; they can also be considered as basic units in society for consumption, production, and decision-making.

Firms

Business organizations, such as corporations or partnerships, engaged in commercial, industrial, or professional activities.

Markets for Goods

Platforms or mediums where goods and services are exchanged between buyers and sellers.

Households

Economic units consisting of all the people who occupy a housing unit, often playing a role as consumers in the economy.