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Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 42P: A small company that shovels sidewalks and driveways has 100 homes signed up for its services this...
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Gomez runs a small pottery fem. He hares one helper at $14,500 per year pays annual rent of $7.500 for his shop, and spends $18,000
per year on materials. He has $40,000 of his own funds invested in equipment pottery wheels, kdns, and so forth) that could eam han
$5.000 per year if aftermatively invested. He has been offered $23.000 per year to work as a potter for a competitor He estimates he
entrepreneurad talents are worth $6,000 per year. Total annual revenue from pottery sales is $86,000
Instructions: Enter your answers as whole numbers
a Calculate the accounting profit for Gomez's pottery firm
b Now calculate Gomer's economic profit
Transcribed Image Text:Gomez runs a small pottery fem. He hares one helper at $14,500 per year pays annual rent of $7.500 for his shop, and spends $18,000 per year on materials. He has $40,000 of his own funds invested in equipment pottery wheels, kdns, and so forth) that could eam han $5.000 per year if aftermatively invested. He has been offered $23.000 per year to work as a potter for a competitor He estimates he entrepreneurad talents are worth $6,000 per year. Total annual revenue from pottery sales is $86,000 Instructions: Enter your answers as whole numbers a Calculate the accounting profit for Gomez's pottery firm b Now calculate Gomer's economic profit
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