Question

Anne Teek works full time as the manager of her used furniture store in which she has invested $40,000. Last year, her total revenues were $90,000 and her costs were $60,000 for merchandise, gas, electricity, and other explicit-cost items. Ms. Teek pays herself a "competitive" salary of $30,000 per year. An economist would consider her profits for the year to be

Answer 1

Answer:

C. $0 minus the opportunity cost of the $40,000 of capital invested in the store.

Explanation:

Data provided in the question

Invested amount for furniture = $40,000

Total revenues = $90,000

Miscelleanous Cost = $60,000

Competitive salary = $30,000

Based on the above information, the profits for the year is $0 that should be less the opportunity cost i.e $40,000 that represents the capital invested in the store and the same is to be considered

Hence, the correct option is c.