One year ago, Jack and Jill set up a vinegar bottling firm (called JJVB) Use the following information to calculate JJVBs opportunity cost of production during its first year of operation Jack and Jill put $50,000 of their own money into the firm They bought equipment for $30,000 They hired one emp...

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One year ago, Jack and Jill set up a vinegar-bottling firm (called JJVB). Use the following information

Question:

One year ago, Jack and Jill set up a vinegar-bottling firm (called JJVB). Use the following information to calculate JJVB’s of production during its first year of operation:
• Jack and Jill put $50,000 of their own money into the firm.
• They bought equipment for $30,000.
• They hired one employee to help them for an annual wage of $20,000.
• Jack gave up his previous job, at which he earned $30,000, and spent all his time working for JJVB.
• Jill kept her old job, which paid $30 an hour, but gave up 10 hours of leisure each week (for 50 weeks) to work for JJVB.
• JJVB bought $10,000 of goods and services from other firms.
• The market value of the equipment at the end of the year was $28,000.
• Jack and Jill have a $100,000 home loan on which they pay interest of 6 percent a year.
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,...