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:

Production Function

An equation or graph that shows the relationship between inputs (like labor and capital) and the maximum output that can be produced.

Marginal Cost

The increment in overall price involved in producing one extra unit of a product or service.

Instructional Modules

Structured units designed to provide learners with information and activities in a specific subject area, often used in educational contexts.

Fixed Cost

A business expense that remains constant regardless of how much goods or services are produced.