Heidi Quit Her Job as a Chef Making $40,000 Per

question 70

Multiple Choice

Heidi quit her job as a chef making $40,000 per year to start her own restaurant. The first year, Heidi's restaurant earned $100,000 in revenue. Heidi pays $50,000 per year in wages to the waitresses and hostess and $20,000 per year to buy food. What is Heidi's economic profit for the year?

• A) $50,000
• B) $30,000
• C) - $10,000
• D) $80,000

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Definitions:

Opportunity Cost

Opportunity cost is the value of the best alternative foregone when a decision is made to pursue a particular action or resource allocation.

Machinery

Machines or machine systems collectively, which are used in a variety of industries to produce or facilitate the production of goods.

Sweaters

Garments intended to cover the upper body and arms, typically knitted from wool, cotton, or synthetic fibers.

Production Possibility Frontiers

A portrayal conveying the absolute production potential for two commodities, hinging on distinct inputs such as resources and supplementary factors.