Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200,buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel andmaintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes this year equaled $90,400. How did Sam's business do this year?
A) Sam realized an economic profit of $3,400 this year.
B) Sam realized an economic loss of $3,400 this year.
C) Sam realized an economic profit of $5,800 this year.
D) Sam realized an economic profit of $3,800 this year.
E) Sam realized an economic loss of $3,800 this year.

Question

Quizplus · Accepted Answer

The Answer of Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hangar that he could have rented out for $5,000 per year. He rents a computer for $1,200,buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel andmaintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes this year equaled $90,400. How did Sam's business do this year?
A) Sam realized an economic profit of $3,400 this year.
B) Sam realized an economic loss of $3,400 this year.
C) Sam realized an economic profit of $5,800 this year.
D) Sam realized an economic profit of $3,800 this year.
E) Sam realized an economic loss of $3,800 this year.

Sam Quits His Job as an Airline Pilot and Opens