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Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner/manager does not choose to pay himself, but he could receive income of $80,000 by working elsewhere. The firm earns revenues of $360,000 per year. What are the annual implicit costs for the firm described above? O $360,000 O $80,000 $160,000 $450,000

Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner/manager does not choose to pay himself, but he could receive income of $80,000 by working elsewhere. The firm earns revenues of $360,000 per year. What are the annual implicit costs for the firm described above? O $360,000 O $80,000 $160,000 $450,000

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 19RQ: What shapes would you generally expect each of the following cost curves to have: fixed costs,...
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Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner/manager does not choose to pay himself, but he could receive income of $80,000 by working elsewhere. The firm earns revenues of $360,000 per year. What are the annual implicit costs for the firm described above? O $360,000 O $80,000 $160,000 $450,000
Transcribed Image Text:Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 in rented property, and $35,000 in interest costs on capital. The owner/manager does not choose to pay himself, but he could receive income of $80,000 by working elsewhere. The firm earns revenues of $360,000 per year. What are the annual implicit costs for the firm described above? O $360,000 O $80,000 $160,000 $450,000
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