Suppose Lando Calrissian owns a smuggling business whose total revenue is $30,000 per month. The accompanying table shows Lando’s monthly expenses. If Lando weren't a smuggler, he would earn $6,000 per month working for the Rebel Alliance. Apart from pay, Lando is indifferent between working as a smuggler and working for the Rebel Alliance. Fuel $ 4,000 Maintenance 12,000 Weapons 6,000 Bribes 3,000 In the long run, we would expect Lando to join the Rebel Alliance since his accounting profit from smuggling is negative. continue smuggling since his accounting profit from smuggling is positive. continue smuggling since his economic profit from smuggling is positive. join the Rebel Alliance since his economic profit from smuggling is negative.
Suppose Lando Calrissian owns a smuggling business whose total revenue is $30,000 per month. The accompanying table shows Lando’s monthly expenses. If Lando weren't a smuggler, he would earn $6,000 per month working for the Rebel Alliance. Apart from pay, Lando is indifferent between working as a smuggler and working for the Rebel Alliance. Fuel $ 4,000 Maintenance 12,000 Weapons 6,000 Bribes 3,000 In the long run, we would expect Lando to join the Rebel Alliance since his accounting profit from smuggling is negative. continue smuggling since his accounting profit from smuggling is positive. continue smuggling since his economic profit from smuggling is positive. join the Rebel Alliance since his economic profit from smuggling is negative.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Suppose Lando Calrissian owns a smuggling business whose total revenue is $30,000 per month. The accompanying table shows Lando’s monthly expenses. If Lando weren't a smuggler, he would earn $6,000 per month working for the Rebel Alliance. Apart from pay, Lando is indifferent between working as a smuggler and working for the Rebel Alliance.
| Fuel | $ 4,000 |
|---|---|
| Maintenance | 12,000 |
| Weapons | 6,000 |
| Bribes | 3,000 |
In the long run, we would expect Lando to
-
join the Rebel Alliance since his accounting profit from smuggling is negative.
-
continue smuggling since his accounting profit from smuggling is positive.
-
continue smuggling since his economic profit from smuggling is positive.
-
join the Rebel Alliance since his economic profit from smuggling is negative.
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