Pat Used to Work as an Aerobics Instructor at the Local

question 7

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 accounting profit is ________, and Pat's economic profit is ________.

• A)$50,000; $15,000
• B)$34,000; −$1,000
• C)$34,000; $15,000
• D)$15,000; −$1,000

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Definitions:

Mead

An alcoholic beverage created by fermenting honey with water, sometimes with various fruits, spices, grains, or hops added.

Demand Function

A mathematical representation that describes the relationship between the quantity demanded of a good and various factors that influence this quantity, such as price.

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Mead

An alcoholic beverage created by fermenting honey with water, sometimes with various fruits, spices, grains, or hops.