Harvey Quit His Job at State University, Where He Earned

question 54

Multiple Choice

Harvey quit his job at State University, where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building. The normal profits for Harvey in the first year were

• A) $5,000.
• B) $160,000.
• C) $220,000.
• D) $150,000.

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Definitions:

Generational Effects

The impact that historical events and cultural trends have on the attitudes and behaviors of individuals born in different time periods.

Liberalism

A political and moral philosophy based on liberty, consent of the governed, and equality before the law.

Conservatism

A political and social philosophy promoting traditional institutions and values, emphasizing stability, continuity, and respect for cultural, historical contexts.