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.
Answer:
d. the total benefit he gets from purchasing four pairs of gloves minus the total benefit he gets from purchasing three pairs of gloves.
Explanation:
Marginal benefits refer to the additional gains obtained by the sales, purchase, or manufacture of an extra unit. It the advantage associated with buying or selling one more unit. Marginal benefit is compared with the marginal cost to determine if continuous production is profitable.
Since marginal benefits are associated with an extra item, obtaining the value of the additional items must exclude the previous units. In this case, getting the marginal benefit of the fourth item can be calculated by adding up the gains of all the four gloves then subtracting the gains of the first three.
Answer:
A written warranty promises replacement or refund for defective products.
Answer:
The answer is: D) Adam's job has low task identity.
Explanation:
The task identity of a job can be defined as the extent at which that job involves completing a piece of work.
In Adam´s case, to complete a piece of work refers to assembling a whole car. Adam´s job is very specific, fixing nuts and bolts. It´s the perfect example of specialization of labor. He may be very good at doing that, but doesn´t feel good about it.