Suppose an Entrepreneur Starts a Business Earning $2M in Revenue

question 13

Multiple Choice

Suppose an entrepreneur starts a business earning $2M in revenue in 2009 while at the same time incurring $1.8M in costs.If the entrepreneur's best outside alternative employment opportunity is to earn $300K,what are the firms accounting and economic profits?

• A)$200K,-$100K
• B)$200K,$100K
• C)$300K,$100K
• D)$300K,-$100K
• E)$200K,$200K

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Definitions:

Standard Deviations

An indicator of how much the values in a group differ from each other.

Samples

Collections or subsets of data taken from a larger population, used for statistical analysis or testing hypotheses.

Level Shift

A sudden and lasting change in the average level of a time series data, indicating a structural break.

Assignable Variation

Variation in a process that can be traced to a specific cause, as opposed to random or inherent variation.