Scenario 12-11 Zach Withdrew $400,000 Out of His Personal Savings Account and Account

question 305

Multiple Choice

Scenario 12-11
Zach withdrew $400,000 out of his personal savings account and used it to start his new cookie business.The bank account pays 3 percent interest per year.During the first year of his business,Zach sold 6,000 boxes of cookies for $2.50 per box.Also during the first year,the cookie business made monetary outlays of $9,000.You may assume that there is no opportunity cost to Zach's time.
-Refer to Scenario 12-11.Zach's accounting profit for the year was

• A) $-494,000.
• B) $-6,000.
• C) $6,000.
• D) $12,000.

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Definitions:

Production Possibilities Curve

A visual diagram illustrating the highest potential production mixes of two products or services that an economy can reach when it uses all its resources in a completely efficient manner.

Stable Supply Curve

A situation in which the supply curve remains unchanged over time, indicating that the quantity supplied is not affected by changes in price.

Increasing Demand

A situation where the quantity of a good or service that consumers are willing and able to buy increases, often due to factors like rising incomes, changes in tastes, or lower prices of the product.

Allocative Efficiency

A state of resource allocation where it is impossible to make any one individual better off without making at least one individual worse off.