During a Year of Operation, a Firm Collects $450,000 in Revenue

question 11

Short Answer

During a year of operation, a firm collects $450,000 in revenue and spends $100,000 on labor expense, raw materials, rent, and utilities. The firm's owner has provided $750,000 of her own money instead of investing the money and earning a 10% annual rate of return.
a. The explicit opportunity costs of using market-supplied resources are $______________. The implicit opportunity costs of using owner-supplied resources are $______________. Total economic cost is $______________.
b. The firm earns economic profit of $______________.
c. The firm's accounting profit is $______________.
d. If the owner could earn 15% annually on the money she has invested in the firm, the economic profit of the firm would be ______________ (when revenue is $450,000).

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Definitions:

Larger Society

Refers to the broader social environment beyond local or immediate contexts, encompassing national or global communities and their norms, values, and structures.

Accountable

Being responsible for one's actions and decisions, often within a professional or organizational context, ensuring transparency and trust.

Profit Responsibility

An organization's or individual's obligation to achieve and maintain profitability through efficient operations and activities.

Cerdelga

Cerdelga is a prescription medication used for the treatment of certain types of Gaucher disease, a genetic disorder.