A business owner makes 1,000 items a

day. Each day she contributes eight hours

to produce those items. If hired, elsewhere

she could have earned $250 an hour. The

item sells for $15 each. Production does

not stop during weekends. If the explicit

costs total $150,000 for 30 days, the firm’s

accounting profit for the month equals

a. $300,000.

b. $60,000.

c. $450,000.

d. $240,000.

 

. If a firm is earning negative economic

profits, it implies

a. that the firm’s accounting profits are zero.

b. that the firm’s accounting profits are

positive.

c. that the firm’s accounting profits are

negative.

d. that more information is needed to

determine accounting profits.