Question

Sarah's accountant tells her that she made a profit of $43,002 running a pottery studio in Orlando. Sarah's husband—an economist—claims Sarah lost $43,002 running her pottery studio. This means her husband is claiming that she incurred ________ in ________ costs. a. $86,004; explicit Selected:b. $0; explicitThis answer is incorrect. c. $86,004; implicit d. $43,002; explicit e. $43,002; implicit

Answer 1

C) $86,004 ; implicit

Step-by-step explanation:

Economic profits or losses are calculating using the following formula:

Economic profit = accounting profit - implicit costs

According to her husband, Sarah's economic loss is $43,002 and her accounting profit is $43,002:

-$43,002 = $43,002 - implicit costs

implicit costs = $43,002 + $43,002 = $86,004