Question
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
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 geography teacher making $80,000 a year or as an interior decorator making $68,000 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 $430,000 and she employs four workers, each of whom earns $30,000 a year. On average, she spends $206,000 per year traveling, purchasing, and shipping unique merchandise for resale at her store. Based on this information, do you think you should encourage her to return to teaching? Explain by discussing her opportunity costs, her accounting profit, and her economic profit (and show your calculations).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started