Pete Owns a Shoe-Shine Business

question 546

Multiple Choice

Pete owns a shoe-shine business. Which of the following costs would be implicit costs? (i)
Shoe polish
(ii)
Rent on the shoe stand
(iii)
Wages Pete could earn delivering newspapers
(iv)
Interest that Pete's money was earning before he spent his savings to set up the shoe-shine business

• A)(i) and (ii) only
• B)(iv) only
• C)(iii) and (iv) only
• D)(i), (ii), (iii), and (iv)

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Definitions:

Deadweight Loss

The loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.

Tariff

A levy placed on goods and services brought into a country to raise their cost and enhance the competitiveness of homegrown products.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness and interdependence of economies worldwide.

Technological Advancements

The progress in technology which enhances efficiency, productivity, and capabilities in various industries.