1. Norman’s Bagel shop sold 3 million bagels last year. Half of the bagels were plain bagels and sold for $.50 each. The remaining bagels were cinnamon raisin bagels and sold for $.80 each. Last year Norman’s A) total costs were $1.95 million B) economic profit was $1.2 million C) accounting profit was $.75 million D) total revenue was $1.95 million Feedback:You can calculate Norman’s total revenue: $.50 * 1.5 million + $.80 * 1.5 million = $1.95 million.
Table for Individual Question Feedback Points Earned: 1.0/1.0 Correct Answer(s): D 2. Bob used to earn $40,000 per year in his job as a nurse, but he quit in order to open his own pizza shop. Bob used $10,000 from his own savings account and borrowed $200,000 more from his bank. The interest rate is 4%. In Bob’s first year of business he earned $80,000 in revenue and the cost of ingredients (flour, tomato sauce, cheese, etc.) was $67,000. For his first year of business, Bob’s accounting profit was _______, and his economic profit was ______.
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Table for Individual Question Feedback Points Earned:1.0/1.0 Correct Answer(s):A
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