Question

Ms. Inga Lott quits her $40,000-a-year job, withdrew $100,000 (which would have earned 10% per year in interest) from her bank to buy capital, and opened a solar energy contracting firm. In the first year, Ingaâ€™s sales were $105,000 and she paid $55,000 to cover all explicit costs, except her own salary. What is Ingaâ€™s economic profit? (Assume no depreciation). A. -$9,000 (she made a loss). B. $0 (she just broke even). C. $10,000. D. $50,000.

Name: ms inga lott quits her 40000 a year job withdrew 100000 which would have earned 10 per year in interest from her bank to buy capital and opened a solar energy contracting firm in the first y 44184
Uploaded: 2023-08-26T16:34:50-08:00
Duration: 2 min
Channel: Lottie Adams
Description: ms inga lott quits her 40000 a year job withdrew 100000 which would have earned 10 per year in interest from her bank to buy capital and opened a solar energy contracting firm in the first y 44184

          Ms. Inga Lott quits her $40,000-a-year job, withdrew $100,000 (which would have earned 10% per year in interest) from her bank to buy capital, and opened a solar energy contracting firm. In the first year, Ingaâ€™s sales were $105,000 and she paid $55,000 to cover all explicit costs, except her own salary. What is Ingaâ€™s economic profit? (Assume no depreciation).

A. -$9,000 (she made a loss).
B. $0 (she just broke even).
C. $10,000.
D. $50,000.

Added by Evan Y.

Principles of Economics

Gregory Mankiw 8th Edition

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Ms. Inga Lott quits her $40,000-a-year job, withdrew $100,000 (which would have earned 10% per year in interest) from her bank to buy capital, and opened a solar energy contracting firm. In the first year, Ingaâ€™s sales were $105,000 and she paid $55,000 to cover all explicit costs, except her own salary. What is Ingaâ€™s economic profit? (Assume no depreciation). A. -$9,000 (she made a loss). B. $0 (she just broke even). C. $10,000. D. $50,000.