MC Qu. 09-40 (Algo) Harvey quit his job at...

Harvey quit his job at State University, where he earned $50,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $7,000 a year. To start the business, he cashed in $80,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 12,000 units of software at $70 for each unit. Of the $70 per unit, $52 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building.

The implicit costs of Harvey's firm in the first year were

Multiple Choice

• $151,000.
• $65,000.
• $216,000.
• $840,000.