Pat Used to Work as an Aerobics Instructor at the Local

question 43

Multiple Choice

Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment. Pat's explicit costs are ________, and Pat's implicit costs are ________.

• A)$16,000; $51,000
• B)$15,000; $36,000
• C)$16,000; $35,000
• D)$35,000; $16,000

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Definitions:

Monetary Exchange

The process by which goods and services are bought and sold using money as a medium of exchange.

Likely

A term used to describe something that has a good chance of happening or being the case.

Direct Exchange

The process of trading goods or services directly for other goods or services without using a medium of exchange, such as money.

Goods And Services

The products and activities that satisfy human wants or needs, goods being tangible items and services being intangible.