Farmer McDonald gives banjo lessons for $20 an hour One day, he spends 10 hours planting $100 worth of seeds on his farm What opportunity cost has he incurred What cost would his accountant measure If these seeds yield $200 worth of crops, does McDonald earn an accounting profit Does he earn an eco...

Farmer McDonalds opportunity cost is 300 consisting of 10 hours of lessons at 20 ...

Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends 10 hours planting $100

Question:

Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends 10 hours planting $100 worth of seeds on his farm. What has he incurred? What cost would his accountant measure? If these seeds yield $200 worth of crops, does McDonald earn an accounting profit? Does he earn an economic profit?

Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...