If Raheem earns $50,000 at his current job and his business generates $70,000 in revenue with $40,000 in explicit costs, what is his economic profit?

To find Raheem's economic profit, we first need to understand the difference between accounting profit and economic profit. Accounting profit is calculated by subtracting explicit costs from total revenue. In Raheem's case, his business generates $70,000 in revenue and has $40,000 in explicit costs, so his accounting profit is $70,000 minus $40,000, which equals $30,000. However, economic profit also considers opportunity costs, which are the income Raheem could have earned elsewhere, in this case, his $50,000 salary from his job. Therefore, to find his economic profit, we take the accounting profit of $30,000 and subtract the $50,000 opportunity cost, resulting in an economic profit of negative $20,000.