Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends per year on materials. He has $40.000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could e $6.500 per year if alternatively invested. He has been offered $22,000 per year to work as a potter for a competitor. He estim entrepreneurial talents are worth $4,500 per year. Total annual revenue from pottery sales is $80,000. Instructions: Enter your answers as whole numbers. a. Calculate the accounting profit for Gomez's pottery firm. b Now calculate Gomez's economic profit

Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends per year on materials. He has $40.000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could e $6.500 per year if alternatively invested. He has been offered $22,000 per year to work as a potter for a competitor. He estim entrepreneurial talents are worth $4,500 per year. Total annual revenue from pottery sales is $80,000. Instructions: Enter your answers as whole numbers. a. Calculate the accounting profit for Gomez's pottery firm. b Now calculate Gomez's economic profit

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.4P

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Andie is considering leaving her job as attorney to pursue her passion by starting a dog grooming business. She currently takes home $6000 per month from her job. She pays $2000 per month to rent her house . if she were to start the dog grooming business, she would operate it out of the currently unused room at the back of her house and she would work at it fulltime. She would hire additional workers and pay them a total of$3000 per month , while spending $1000 per month on materials . she already has everything else she needs to start the business. What are the monthly economic costs of Andies potential dog grooming business.
Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm.
Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm. A. How much is the normal profit? (Use a whole number, no currency, no comma, no space
Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm. a. How much is the accounting profit? (Use a whole number, no currency, no comma, no space) b. How much is the normal profit? (Use a whole number, no currency, no comma, no space) c. How much is the total explicit cost? (Use a whole number, no currency, no comma, no space) d. How much is the total implicit cost? (Use a whole number, no currency, no comma, no space) e. How much is the economic profit? (Use a…
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