Zelda Is a Recent Fashion Graduate

question 72

Multiple Choice

Zelda is a recent fashion graduate. She started her own apparel store with an investment of $300,000. In the first year she made a profit of $60,000. If she had taken up a job as a fashion editor for a magazine, she would have earned $50,000 as salary per year. Also, she could have invested her capital, $300,000, in treasury bonds and earned an interest of $12,000. Thus, the amount $62,000 ($50,000 + $12,000) would be Genevieve's

• A) social cost.
• B) break-even price.
• C) reservation price.
• D) opportunity cost.

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Definitions:

Financial Account

Part of the balance of payments, recording transactions that involve financial assets and liabilities between domestic and foreign entities.

Balance Of Payments

Documentation of every economic exchange between the people of a nation and international counterparts within a designated period.

International Transactions

Economic exchanges between countries, including the transfer of goods, services, capital, and payments across national borders.

Trade Deficit

A situation in which a country's imports of goods and services exceed its exports.