Answer:
in this problem, we need to calculate Gomez's accounting and economic profit. To do this, let us first classify and list the explicit and implicit costs. Revenue: Sales: $85,000 Explicit costs: Cost of one helper: $18,000 Rent: $8,000 Materials: $24,000 These are the costs that require an outlay of cash. Implicit costs: Opportunity cost of funds invested in equipment: $7,000 Gomez could have invested the funds in another asset that could earn him $7,000 Opportunity cost of working as a potter in his own shop: $20,000 Gomez could have worked as a potter for a competitor that could earn him $20,000. This is the worth of Gomez's skill as a potter. Entrepreneurial talent: $4,000 This is the worth of Gomez's talent in running the business. These costs do not require an outlay of cash. These are the implicit costs. Now, we are ready to calculate both the accounting and economic profit of Gomez. a. Calculate the accounting profit for Gomez's pottery firm. $_ Accounting profit = Total Revenue − Total Explicit Costs Accounting profit = $ 85 , 000 − ( $ 18 , 000 + $ 8 , 000 + $ 24 , 000 ) Accounting profit = $ 85 , 000 − $ 50 , 000 Accounting profit = $ 35 , 000 The accounting profit is equal to $35,000. b. Now calculate Gomez's economic profit. $_ Economic profit = Total Revenue − Total Explicit and Implicit Costs Economic profit = $ 85 , 000 − ( $ 18 , 000 + $ 8 , 000 + $ 24 , 000 + $ 7 , 000 + $ 20 , 000 + $ 4 , 000 ) Economic profit = $ 85 , 000 − $ 81 , 000 Economic profit = $ 4 , 000 The economic profit is equal to $4,000.
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Answer:
B) a computer repair shop owner who opens a second shop across town
Explanation:
Answer:
The employees' marginal product of labor is 2 jobs/employee.
The value of that marginal product is $160.
The moving service hire a fourth worker, as the additional revenue is greater than the additional cost.
Explanation:
The employee's marginal product of labor is the additional output that the company gets out of an additional worker, at the actual level of production. In this case, as the company would go from 3 jobs to 5 jobs with the addition of an employee, the employee's marginal product of labor is 2 jobs/worker.
The value of marginal product is the value of this additional jobs that an additional employee will bring. In this case, each job is charged $80, so the value of that marginal product is 2*80=$160.
The cost of an additional employee is 3*18=$54. As the additional income ($160) is greater than the additional cost of a employee ($54), they should hire a fourth worker.
Answer:
Option "A" is the correct answer to the following statement.
Explanation:
A current news article reported that next year, OPEC is expected to reduce oil supply.
Summer is typically a period of higher demand for oil owing to the many families traveling and going to the holiday sites.
- Then it is a price increase and an unexpected amount shift.
The up-sloping demand curve, where there is little incentive to sell for increased prices, is moved to the right, since more vendors are willing to supply at a lower price, allowing volumes to increase for a particular price.
