1.The most important implicit cost generally omitted from the accounting statement of a firm is the

A.rental cost of machinery.

B.cost of compliance with government regulations.

C.opportunity cost of the equity capital invested by the owners.

D.accounting cost incurred as the result of tax compliance.

2.The difference between zero accounting profit and zero economic profit is that

A.economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero accounting profit.

B.economists do not include opportunity cost in zero economic profit, while accountants do include opportunity cost in zero accounting profit.

C.economists include opportunity cost in zero accounting profit, while accountants do not include opportunity cost in zero economic profit.

D.economists do not include opportunity cost in zero accounting profit, while accountants do include opportunity cost in zero economic profit.

3.Ben quit his job as an economics professor to become a golf professional. He gave up his $30,000 salary and invested his retirement fund of $50,000 (which was earning 10 percent interest) in this venture. After all expenses, his net winnings were $35,000. Ben's economic profits were

A.$35,000

B.$5,000

C.$2,000

D.zero

4.Maureen left her teaching job, which paid $30,000 per year, and invested $20,000 of her retirement fund (which was earning 10 percent interest) in a new real estate business. Her accountant projected $50,000 in profit for the first year. Her husband forecast her economic profit to be

A.zero

B.$18,000

C.$32,000

D.$50,000

5.A foreign exchange student bought a used car for $10,000 and resold it one year later for $6,500. Insurance, license, and operating costs for the year were $1,500. What was his economic cost of owning and operating the car for the year if the market rate of interest was 10 percent?

A.$3,500

B.$5,000

C.$6,150

D.$8,500