If a Firm Has Revenues of $125, Explicit Costs of $25

question 28

Multiple Choice

If a firm has revenues of $125, explicit costs of $25, and implicit costs of $50, then its economic profit is:

• A) $0.
• B) $50.
• C) $100.
• D) $500.

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Definitions:

Exchange-traded Fund

A type of investment fund and exchange-traded product, i.e., they are traded on stock exchanges. ETFs hold assets such as stocks, commodities, or bonds and generally operate with an arbitrage mechanism designed to keep it trading close to its net asset value.

SPDR

Specialty financial products known as Spider, they are exchange-traded funds (ETFs) that attempt to mimic the performance of a specific index, such as the S&P 500.

Spider

A nickname for SPDR (Standard & Poor's Depositary Receipts), a type of exchange-traded fund that mimics the performance of the S&P 500.

12b-1 Charges

Fees associated with mutual funds, charged annually for fund distribution and marketing costs, embedded in the fund's expense ratio.