Use the Following to Answer Questions

question 7

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 economic profit of Wang's Wicker Furniture Store is:

• A) $67 000.
• B) $0.
• C) -$20 000.
• D) -$35 000.

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Definitions:

Risk-loving

A preference for options with uncertain outcomes, rather than those with more predictable results, often with the hope of higher rewards.

Marginal Utility

The supplementary enjoyment or value obtained by consuming another unit of a good or service.

Disability Insurance

A type of insurance that provides financial support to individuals who cannot work due to a disability.

Expected Utility

The anticipated satisfaction or value derived from a decision, taking into account the probabilities of different outcomes.