Use the Following to Answer Questions

question 71

Multiple Choice

Use the following to answer questions :
Scenario: Accounting and Economic Profit
Rather than put the $100 000 that his grandmother left him in a mutual fund that earns 5% each year,Tommy Wang quit his job,which paid $60 000 per year,and started Wang's Wicker Furniture Store.He rented a showroom for $20 000 for the year,purchased $60 000 in wicker furniture,and incurred costs of $40 000 for sales help and advertising.In his first year,his revenue was $150 000.
-(Scenario: Accounting and Economic Profit) Use Scenario: Accounting and Economic Profit.The implicit cost of capital for Wang's Wicker Furniture Store is:

• A) $0.
• B) $2 000.
• C) $5 000.
• D) $50 000.

---

Definitions:

Lumber

Timber that has undergone transformation into boards and beams, representing an intermediate phase in the creation of wooden materials.

Comparative Advantage

Comparative advantage refers to the ability of a country or firm to produce a particular good or service at a lower opportunity cost than its competitors.

Labor Abundance

A situation where there is a large supply of workers relative to the demand for labor, which can affect wages and employment levels.

Textiles

Fibrous materials, including cloth and fabric, that are woven, knitted, or otherwise processed for use in producing goods like clothing, home furnishings, and industrial products.