Exam 21: Rents, Profits, and the Financial Environment of Business

Which of the following is the most common form of a business organization?

The higher the expected rate of inflation,

For an actor whose natural talent is almost impossible to duplicate

Assuming a market interest rate of 6 percent per year, what is the present value of $5,000 payable at the end of three years?

The form of business organization responsible for generating the greatest portion of business revenues in the United States is the

People basically borrow in order to

Which of the following is NOT an explicit cost?

Hillary starts her own business. She quits her $50,000 a year job, rents an office for $15,000 a year, pays wages and salaries of $50,000 a year, utilities of $4,000 a year, and materials of $20,000. She uses her own car for sales work rather than leasing an equivalent car for $6000 a year. If revenues are $140,000, her accounting profit and economic profit are respectively

Suppose that you open your own business and earn an accounting profit of $40,000 per year. When you started your business, you left a job that paid you a $25,000 salary annually. Also, suppose that you invested $70,000 of your own funds to start up your business. If the normal rate of return on capital is 5 percent, your economic profit is

Juanita has just started a business and is using her personal car to deliver goods. The use of her car is an example of

Interest rates are higher the

-Refer to the above figure. What can we say about economic rent?

For an individual who has special talent as a singer, a large proportion of her salary can be considered

For superstar athletes

When a business is considered by law to be a legal entity, it is known as a

If the interest rate is 1 percent and a business pays $100,000 for a lease on a factory, the explicit costs are

Owners may have little to do with the management of the firm in the case of

If the death of an owner causes the firm to dissolve, the firm must have been

All of the following are characteristics of a proprietorship EXCEPT

If the interest rate is 5 percent per year and you borrow $100 for two years, at the end of the second year you must pay back