Scenario 5.1 A dentist's practice is organized as a sole proprietorship. Last year the dentist's total revenue was $320.000 and total costs were $250,000. The dentist left a job paying $112,000 a year to start the sole proprietorship. Question: According to the information in Scenario 5.1, how much accounting profit did the dentist make last year? O $320,000 O $70,000 O $208.000 O $112,000
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- What is die difference between accounting and economic profit?Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns? Figure 7.7 How output Affects Total costsScenario 5.1 A dentist's practice is organized as a sole proprietorship. Last year the dentist's tota revenue was $320,000 and total costs were $250,000. The dentist left a job paying $112,000 a year to start the sole proprietorship. Question: According to the information in Scenario 5.1, how much accounting profit did the dentist make last year? O $208,000 O $112,000 O $320,000 O $70,000
- Under which of the folowing examples is t likaly that the accounting profit is positive and the economic profit is negative? OA Using a restaurant you purchased to sell Menican food instead of talian food. OR It you use a diamond mine as a touriet atraction instead of using it for mining. Oc Opering a bank branch near a university campus. OD. Such a scenario, where accounting cost is positive and economic profit is negafive, is not possibie.O e none of the mentioned CLEAR MY CHOICE ion Economic profits differ from accounting profits because O a all of the mentioned O b. the former is calculated by economists and the latter by accountants out of Oc most firms report economic profits once a year and accounting profits every pay period O d. none of the mentioned Oe many firms own their own capital so accounting profits do not factor this cost P Type here to search %23 1 2 4 & 7 Q E T A S. C V } BY Alt (5 מ א LL 11The manager of the donut shop tells you that hesells donuts for $1 each, and that if he were to makeadditional donuts, based on his current level ofoutput, it would cost him $0.80 per donut. Do yourecommend that the manager increase or decreasethe number of donuts he makes?
- Consider the case of a manufacturing company which produces and sells brand pens. The selling price is $20 per pen, the total fixed operating cost is $2 million, and the variable cost per unit is $10, the total fixed financing cost is $500,000. How many pens should the company sells so it would neither make a profit or loss? O a. 4,000,000 O b. 20,000,000 O c. 200,000 O d. 25,000 O e. 2,500,000What is the difference between accounting profit and economic prof? A Economic profit subtracts both explicit and implicit costs from total revenue, while acounting profit only subtracts explicit costs. OR Accounting proft only subtracts implicit costs from totsi revenue, while economic profit only subtracts explicit costs. OC Economic proft orly subtracts implicit costs from total revenue, while accounting profit only subtracts explicit costs. OD. Accounting proft suberacts both explicit and implicit costs from total revenue, while economic proft only subtracts explicit costs5d What is the relationship between accounting profit and economic profit? Which is relevant for a firm’s decision to continue production and why? Give examples as to what may cause a divergence between accounting and economic profit
- The total cost of Mr. Plow, a snow-removal business, is given in the table below. Quantity adriveways cleared) Abbreviation Formula: Total Revenue TR Total Cost TC $0 $25 20 30 40 50 60 70 80 34 41 46 49 51 54 60 70 95 145 10 100 What is the total profit of cleaning five driveways if the price Mr. Plow can charge is $10 per driveway? s 01/21 VIEW sOLUTION O OF 21QUESTIONS COMPLETED 28 MacBook Pro 59Isit possible for accounting profit to be positive and economic profit to be negative? OA Na, economic profit and accounting profit will always end up being the same. OB. No, economic profit must always be larger than accounting profit. OC Yes, this could ocour if axplicit costs were modest and implict costs were high. OD. Yos, this could occur if impiot costs were modest and explict costs were high.QUESTION 39 What name is given to the level of profit required to keep a firm in business? O a. Maximum profit O b. Supernormal profit O c. Minimum profit O d. Normal profit