Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients an
Linda sells 100 bottles of homemade ketchup for $10 each. The cost of the ingredients and the bottles and the labels was $700. In addition, it took her 20 hours to make the ketchup and to do so she took time off from a job that paid her $20 per hour. Linda’s accounting profit is _____________ while her economic profit is ______________.
a. $700; $400
b. $300; $100
c. $300; negative $100
d. $1,000; negative $1,100
2. Which of the following are short-run and which are long-run adjustments?
a. Wendy’s builds a new restaurant.
b. Harley-Davidson Corporation hires 200 more production workers.
c. A farmer increases the amount of fertilizer used on his corn crop.
d. An Alcoa aluminum plant adds a third shift of workers.