An economist left her $100 000-a-year teaching position to work full-time in her own consulting business.In the first year,she had total revenue of $200 000 and business expenses of $100 000.She made a/an:

Question

Quizplus · Accepted Answer

The economist's economic profit is calculated by subtracting both explicit costs (business expenses) and implicit costs (the foregone salary of $100,000) from total revenue. Here, $200,000 - $100,000 (expenses) - $100,000 (foregone salary) = $0, resulting in zero economic profit.

An Economist Left Her $100 000-A-Year Teaching Position to Work