An economist left his $100,000-a-year teaching position to work full-time in his own consulting business. In the first year, he had total revenue of $200,000 and business expenses of $150,000. She made a(n):

Question

Quizplus · Accepted Answer

The economist's economic profit is calculated by subtracting both explicit costs (business expenses) and implicit costs (the foregone salary) from total revenue. Here, $200,000 - $150,000 - $100,000 = -$50,000, indicating an economic loss.

An Economist Left His $100,000-A-Year Teaching Position to Work Full-Time