Use the Following to Answer Questions

question 124

Multiple Choice

Use the following to answer questions:
Scenario: Accounting and Economic Profit
Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. Instead of using the capital for his own business, he could rent it to a rival firm and earn $5,000 a year. In his first year, his revenue was $150,000.
-(Scenario: Accounting and Economic Profit) Look at the scenario Accounting and Economic Profit. What is the opportunity cost of Wang's $100,000 inheritance being used to start his business?

• A) $0
• B) $5,000
• C) $10,000
• D) $100,000

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Definitions:

Biological Cause

A factor related to biological or physiological processes that leads to a particular condition or characteristic.

Dissociative Amnesia

A disorder characterized by memory loss that is too extensive to be explained by ordinary forgetfulness, often related to traumatic events or stress.

Stressful Experience

An event or situation that causes significant strain or pressure, triggering the body's stress response.

Memory Loss

The inability to remember information and experiences that would normally be able to be recalled, which can be temporary or permanent and due to various reasons including diseases, brain injury, or psychological trauma.