Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You decide to rent a cabin for the summer to sell taffy. Below are the costs and revenue you consider. . Rent for cabin: $15,000

image text in transcribed
image text in transcribed
You decide to rent a cabin for the summer to sell taffy. Below are the costs and revenue you consider. . Rent for cabin: $15,000 Purchase Equipment: $10,000 . PFD CD Interest (at 10%) you would have earned if you had not cashed out your CD: $1,000 . ingredients (sugar, flavorings, etc.): $5,000 . Foregone wages if you had decided to work for The Fire Service for the summer: $6,000 . Wages to your employee to work at the cabin: $4,000 . Total Sales: $40,000 Total Revenue: ["$36,000", "$100,000", "$40,000", "$6,000"] Explicit Costs: ["$36,000", "$40,000", "$34,000", "$10,000"] Implicit Costs: [ $7,000,, "$76,000", "$36,000", "$6,000"] Accounting Profit: ["$40,000", "$6,000", "$76,000", "$36,000"] Economic Profit: ["$34,000", "$6,000", "$40,000", "-$1,000"] Economists claim that the accounting measure does not fully capture all the ["marginal", "the", "opportunity", "profits"] costs of production

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bank Management

Authors: Timothy W Koch, Steven Scott MacDonald, S Scott MacDonald

6th Edition

0324289278, 9780324289275

More Books

Students also viewed these Economics questions

Question

What aerodynamic factors affect induced drag?

Answered: 1 week ago

Question

14. Now reconcile what you answered to problem 15 with problem 13.

Answered: 1 week ago