Suppose That for Last Year, Sarah's Small Business Earned an Accounting

question 6

Multiple Choice

Suppose that for last year, Sarah's small business earned an accounting profit of $70,000 and an economic profit of $20,000. What can we correctly infer about Sarah's business?

• A)The difference between Sarah's total opportunity costs and her accounting costs is $50,000.
• B)Sarah's explicit costs were $50,000
• C)Sarah's total opportunity cost of her resources was $50,000.
• D)Sarah's firm cannot be maximizing profit.

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Definitions:

Pathological Traits

Characteristics or behaviors that are indicative of disease or severe psychological conditions.

Hostility

An attitude or behavior that is aggressively antagonistic, unfriendly, or opposing toward people or ideas.

Depression

A mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.

Important Relationships

Bonds or connections between individuals that are considered significant or valuable, often influencing well-being and behavior.