The Opportunity Cost of a Firm Using Its Own Capital

question 173

Multiple Choice

The opportunity cost of a firm using its own capital is

• A) economic depreciation.
• B) self ownership depreciation.
• C) economic loss.
• D) normal loss.
• E) capital loss.

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Definitions:

Entrepreneur

An individual who initiates, organizes, and operates a business venture while assuming the associated risks.

Compensated

To be given something, typically money, in recognition of service, effort, or loss.

Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, taxes, and costs associated with sustaining the business operations.

Closed-shop

A form of union security agreement where the employer agrees to hire union members only, and employees must remain members of the union at all times.