Suppose Joe Starts His Own Business

question 16

Multiple Choice

Suppose Joe starts his own business. In the first year the business earns $100,000 in revenue and incurs $85,000 in explicit costs. In addition, Joe has a standing offer to come work for his brother for $40,000 per year. Joe's accounting profit is _________ and Joe's economic profit is __________.

• A)-$25,000 and $15,000
• B)$15,000 and $65,000
• C)$15,000 and $60,000
• D)$15,000 and -$25,000

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Definitions:

Selfishness

The behavior or attitude of placing one's own needs or desires above the welfare of others, often at the expense of others' well-being.

Precausal Reasoning

A type of reasoning typical in early childhood where cause and effect relationships are understood in simplistic and sometimes magical ways.

Confusion

A state of being puzzled or unclear about something, often due to a lack of understanding or ambiguous information.

Egocentrism

Refers to the cognitive inability to understand that other people's views and perspectives are different from one's own.