Question
(b) Your mother owns and runs an arts and craft store, and the business is doing well. She would have otherwise been employed as a
(b) Your mother owns and runs an arts and craft store, and the business is doing well. She would have otherwise been employed as a high school history teacher making $75,000 a year or as a swimming coach making $64,000 a year. She owns the building in which her shop is located, which she could have rented out for $24,000 a year. Her annual revenue from the shop is $455,000 and she employs four workers, each of whom earns $40,000 a year. On average, she spends $200,000 per year traveling, purchasing, and shipping unique merchandise for resale at her store. Based on this information, should you encourage her to return to teaching? Explain why or why not with the help of calculations on her opportunity costs, accounting profit, and economic profit.(Note: You should present some numeric calculations to support your answer).
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