Amber owns a small pizza restaurant, where she works full-time in the kitchen. Last year, her accounting profit was $9000. When she decided to run her small pizza restaurant last year, she quit her job and withdrew $60,000 from her bank savings account, earning 6% interest revenue. Referring to the scenario described, what is the economic profit for Amber’s pizza restaurant?

Question

BlackTom AI · Accepted Answer

Here is how to approach the problem step by step, considering opportunity costs in economic profit.

Option a. $5,400
First, identify the economic profit concept: it equals accounting profit minus all opportunity costs of the resources used. Amber earned accounting profit of $9,000 from the restaurant. The scenario mentions she withdrew $60,000 from savings, which implies an opportunity cost: the interest she could have earned if that money stayed in the bank. At 6% interest, the foregone interest is 0.06 × $60,000 = $3,600. There is no information given about a salary foregone from quitting a job, so we assume the primary explicit opportunity cost here is the foregone interest on the withdrawn savings. Therefore economic profit = $9,000 − $3,600 = $5,400. This matches option a.

Option b. −$54,600
This value would imply subtracting the entire $60,000 plus the $9,000, or otherwise double-counting costs. It does not align with standard opportunity-cost accounting, which separately accounts for foregone earnings like the interest on the withdrawn savings. Hence this is incorrect.

Option c. $4,000
This would correspond to subtracting only $5,000 of opportunity cost, which is inconsistent with the given 6% rate on $60,000. If the opportunity cost were $5,000, the interest rate would need to be 8.33% or the principal different; the problem states 6% on $60,000, so $3,600 is the correct foregone cost, not $5,000.

Option d. $7,200
This would arise if you subtracted a larger amount as the opportunity cost, specifically $1,800 more than the correct $3,600, or possibly added $9,000 to some cost. However, the only stated explicit opportunity cost is the foregone interest of $3,600, so $7,200 is not justified by the given data.

In summary, the economic profit correctly equals the accounting profit minus the foregone interest on the withdrawn savings: $9,000 − $3,600 = $5,400. Option a is the correct choice, while options b, c, and d misstate the opportunity costs or misinterpret the given data.

MUF0061 Economics Unit 1 - Semester 2, 2025

查看解析

登录即可查看完整答案

类似问题

An industry is characterized by positive economic profits. This means that

The type of profit that considers opportunity costs is…

If the firm produces 10 units of output, its economic profits will equal

Greencom is currently producing 20 units of output. At this level of output, Greencom’s marginal revenue is $6, marginal cost is $6, and average total cost is $9. If Greencom operates in a perfectly competitive market and sells all 20 units of output for $10 per unit, it can be concluded that

Which of the following best describes the implication of a firm earning zero economic profit?

Super-normal profit occurs when:

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单