Adam operates a small shop specializing in party favors. He owns the build- ing and supplies all of his own labor and money capital. Adam incurs no explict rental or wage cost. Before starting his own bussines Adam earned $1,000 per month by renting out the store and earned $2,500 per month as a store manger for a lrge department store chain. Because Adam use his own money capital, he also sacrificed $1,000 per month interest earned on U.S government treasury bonds. Adam’s monthly revenues from operating his shop are $10,000 and his total monthly expense for labor and supplies amounted to $6,000. Calculate Adam’s monthly accounting and economic profits
Adam operates a small shop specializing in party favors. He owns the build- ing and supplies all of his own labor and money capital. Adam incurs no explict rental or wage cost. Before starting his own bussines Adam earned $1,000 per month by renting out the store and earned $2,500 per month as a store manger for a lrge department store chain. Because Adam use his own money capital, he also sacrificed $1,000 per month interest earned on U.S government treasury bonds. Adam’s monthly revenues from operating his shop are $10,000 and his total monthly expense for labor and supplies amounted to $6,000. Calculate Adam’s monthly accounting and economic profits
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
Related questions
Question
Adam operates a small shop specializing in party favors. He owns the build- ing and
supplies all of his own labor and money capital. Adam incurs no explict rental or wage
cost. Before starting his own bussines Adam earned $1,000 per month by renting out
the store and earned $2,500 per month as a store manger for a lrge department
store chain. Because Adam use his own money capital, he also sacrificed $1,000 per
month interest earned on U.S government treasury bonds. Adam’s monthly revenues
from operating his shop are $10,000 and his total monthly expense for labor and
supplies amounted to $6,000. Calculate Adam’s monthly accounting and economic profits
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning