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25 April, 00:03

You decide to quit your $60,000-per-year job as an information technology specialist and illustrate children's books. At the end of the first year of illustrating, you have earned $20,000. You also spent $5,000 for paint and paper. Your economic profit in the first year as an illustrator is: - $40,000. $20,000. $15,000. - $45,000

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  1. 25 April, 03:26
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    Answer: $ - 45,000

    Explanation:

    Economic profit = Accounting profit - Opportunity cost

    Accounting profit = Revenue - Cost

    Accounting profit = $20,000 - $5000 = $15,000

    Economic profit = $15,000 - $60,000 = $ - 45,000

    Opportunity cost is the cost of choosing one alternative over other alternatives.
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