Refer to Scenario 7.6 below to answer the question(s) that follow.
SCENARIO 7.6: Upon graduating with an accounting degree, you open your own accounting firm of which you and your assistant are the only employees. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $50,000 annually. Last year you earned a total revenue of $120,000. Rent and supplies last year were $50,000. Your assistant's salary is $30,000 annually.
-Refer to Scenario 7.6. Your annual economic costs are
A) $50,000.
B) $80,000.
C) $100,000.
D) $130,000.

Question

Quizplus · Accepted Answer

The annual economic costs include explicit costs (rent, supplies, and assistant's salary) totaling $80,000 ($50,000 + $30,000) and the opportunity cost of the forgone salary of $50,000, summing up to $130,000.