Harvey Quit His Job at State University, Where He Earned

question 54

Multiple Choice

Harvey quit his job at State University, where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The normal profits for Harvey in the first year were

• A) $5,000.
• B) $160,000.
• C) $220,000.
• D) $150,000.

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Definitions:

Writ of Certiorari

An order issued by a higher court to a lower court to transfer the records of a specific case for review.

Administrative Law

The rules and regulations governing the function and powers of the executive branch of government.

Judicial Review

Power held by the courts to review decisions made by administrative decision makers.

Statement of Claim

A legal document filed in court outlining the plaintiff's claims against the defendant and the basis for those claims.