Norman Dowd owns his own taxi, for which he bought a $$12,000$ permit to operate two years ago. Mr$.$ Dowd earns $$36,000$ a year operating as an independent but has the opportunity to sell the taxi and permit for $$46,500$ and take a position as dispatcher for Carter Taxi Company The dispatcher position pays $$37,500$ a year for a $40-$hour week. Driving his own taxi, Mr$.$ Dowd works approximately $55$ hours per week. If he sells his business, he will invest the $$46,500$ and can earn a $12$ percent return.

Required

a$.$ Determine the opportunity cost of owning and operating the independent business.

b$.$ Calculate the earnings of Norman Dowd operating as an independent and the earnings of Norman Dowd working as a dispatcher. Based solely on financial considerations, should Mr$.$ Dowd sell the taxi and accept the position as dispatcher?

a$.$ Opportunity cost

b$.$ Operating as an independent

b$.$ Working as a dispatcher

b$.$ Should Mr$.$ Dowd sell the taxi and accept the position as dispatcher?