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Flauer [41]
4 years ago
15

Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $2

0,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm.
Business
1 answer:
bearhunter [10]4 years ago
5 0

Answer: Accounting profit = $35000, Economic profit = $13000

Explanation:

Accounting profit = Revenue - Explicit cost

Accounting profit = Revenue - Cost of Help - Rent - Cost of materials

Accounting profit = $72000 - $12000 - $5000 - $20000

Accounting profit = $35000

Economic profit = Revenue - Explicit cost - Implicit Cost

Economic profit = Revenue - Cost of Help - Rent - Cost of materials - Renting equipment - working for competitors - talent

Economic profit = $72000 - $12000 - $5000 - $20000 - $4000 - $15000 - $3000

Economic profit = $13000

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sorry if its wrong!

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3 years ago
Domestic producers of manufactured goods often base their demand for import protection on the fact that workers in Indonesia, fo
Vilka [71]

Answer:

No, it is not a valid argument for import protection

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There are several arguments that are waged in favor of protectionism. One of the most common, that is seen in this question, in the unfair competition argument, in which domestic producers argue that producers from abroad pay unfair wages, or engage in dumping, or do not pay enough for raw materials.

The fact is, what is a substandard wage in the United States, is probably an average, or even higher-than-average wage in Indonesia, because wages are determined by the market conditions in each country. Indonesia, as a low-income country, has wages on average well below the average wage in the United States, a high-income country.

Therefore, domestic producers do not have any valid reason to demand import protection because Indonesian producers pay substantially lower wages than them. These are economic realities given by market conditions.

3 0
4 years ago
You are evaluating the balance sheet for Goodman's Bees Corporation. From the balance sheet you find the following balances: cas
valkas [14]

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$2,830,000

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net working capital = $5,060,000 - $2,230,000 = $2,830,000

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Are there answer options?

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