Suppose Joe Starts His Own Business

Multiple Choice

Suppose Joe starts his own business. In the first year the business earns $100,000 in revenue and incurs $85,000 in explicit costs. In addition, Joe has a standing offer to come work for his brother for $40,000 per year. Joe's accounting profit is _________ and Joe's economic profit is __________.

A) -$25,000 and $15,000
B) $15,000 and $65,000
C) $15,000 and $60,000
D) $15,000 and -$25,000