A Small Business Owner Earns $75,000 in Revenue Annually

question 47

Multiple Choice

A small business owner earns $75,000 in revenue annually. The explicit annual costs equal $40,000. The owner could work for someone else and earn $20,000 annually. The owner's accounting profit is ________ and owner's economic profit is ________.

• A)$10,000, $10,000
• B)$35,000, $10,000
• C)$35,000, $55,000
• D)$10,000, $55,000

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Definitions:

Effective Cycle

The portion of a process or machine's operational cycle that contributes directly to its intended function or output.

Air Conditioning System

A system designed to control the temperature, humidity, and air purity inside a closed environment.

Centrifugal Clutch

A clutch pack that uses centrifugal force to engage as engine rpm is spooled up and disengages as it spools down; uses a simple ball-and-ramp engagement hub. An example is the Eaton AutoClutch used with the UltraShift AMT.

Stem-Type

Referring to a type of valve or control that uses a stem-like component to operate or regulate flow.