Sam Quits His Job as an Airline Pilot and Opens

question 121

Multiple Choice

Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hanger and could rent it out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel and maintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes equaled $90,400. Sam's implicit costs for this year are equal to:

• A) $84,400.
• B) $39,000.
• C) $55,000.
• D) $45,600.
• E) $40,000.

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Definitions:

Arabian Sea

A region of the northern Indian Ocean bounded on the northwest by Pakistan and Iran, on the west by the Horn of Africa and the Arabian Peninsula, and on the east by India.

Bay of Bengal

A large body of water in the northeastern Indian Ocean bounded by Bangladesh to the north, Myanmar and the Andaman and Nicobar Islands to the east, and India to the west.

Sea Surface Temperatures

The temperature of the surface layer of the ocean, which varies geographically and seasonally, influencing weather and climate patterns.

Equator

An imaginary line around the Earth equidistant from the North and South Poles, marking the latitude 0°.