(Scenario: Accounting and Economic Profit) use scenario: accounting and economic profit. What is the opportunity cost of Wang's $100,000inheritance being used to start his business?

Rather than put the $100,000 that his grandmother left him in a mutual fund and earn 5% each year, Tommy Wang quit his job that paid $60,000 per year and used the $100,000 to start Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising.

A. $100,000

B. $5,00

C $10,000

D $ 0

(B) $65,000

Explanation:

Opportunity costs refers to the benefits that a person is sacrificing for selecting some other alternatives. Opportunity cost is also known as the implicit costs.

Here, the implicit costs are as follows:

(i) Interest income from investing in a mutual fund:

= $100,000 × 5%

= $5,000 per year

(ii) Money income from the job left = $60,000 per year

Therefore, the opportunity cost for starting the business is as follows:

= Interest income + Salary foregone

= $5,000 + $60,000

= $65,000

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

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be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation: