Suhail decided to leave his job that paid him a salary of OMR 35,000 to start a Café. For this purpose, he take over an Office space which he had given on rent for OMR 5,000 per year. His annual expenses at the café are OMR 15,000 for raw materials and OMR 2,000 for utility bills. Calculate his Accounting profit, Economic profit and Normal profit if his TR is OMR 95,500.

Suhail decided to leave his job that paid him a salary of OMR 35,000 to start a Café. For this purpose, he take over an Office space which he had given on rent for OMR 5,000 per year. His annual expenses at the café are OMR 15,000 for raw materials and OMR 2,000 for utility bills. Calculate his Accounting profit, Economic profit and Normal profit if his TR is OMR 95,500.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 1CQQ

See similar textbooks

Similar questions

What is die difference between accounting and economic profit?
Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns? Figure 7.7 How output Affects Total costs
The sole proprietor of the "Books and More" bookstore receives all accounting profits earned by her firm and a $28,000-a-yearsalary she pays herself. She has a standing salary offer of $35,000 a year if she agrees to work for a large corporation. If she had invested her capital outside her own company, she estimates that would have returned $22,000 a year. Last year, her accounting profit was $50,000. What was her economic profit?
Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. Your aunt’s opportunity costs comprise * If your aunt thought she could sell $510,000 worth of merchandise in a year, what is your aunt’s accounting profit? *$10,000-$40,000$460,000$0Given the above situation, what is your aunt’s economic profit? *$10,000-$40,000$460,000$0
Danielle decides to withdraw her savings of $70,000 and invest in starting her own clothing business. She normally earns $3,000 in interest from her savings. If Danielle earned an accounting profit of $60,000 last year, what was her economic profit?
Q3_A The Break even Analysis of firm show that: BEP = 1000 FC = 10,000 $ P = 3% of the quantity of zero profit. A) The point of intersection of TR with TC is at the cost point of $ 45,000 for TR. B) At the point where (zero units sold) TC equals $ 5,000 C) the start of the line drawing for TR is at cost point $ 0 D) the value UVC for the product in question equals $ 10) E)the FC value in a point for BFP equals $ 10,000 For the given choices, showing which one is True and which one is False, correcting the False ones and given a reasonable reason for the True. Write your answer below:
2. September 2019/2020 Tim decided to quit from his job as an event manager where he earned RM130,000 a year. Tim sets up a telecommunication business, using his RM600,000 personal savings that earned interest of RM6,000 per year. During that year, he made RM240,000 in total revenue and paid RM13,000 for the costs of equipment, utilities, internet service and office supplies. (i) Calculate Tim’s accounting profit and economic profit. (ii) “I am not sure if I made the right decision to start this business.” says Tim. Comment on the above statement.
connie turn down job offer with insurance company that would have her paid 70,000 per year to start her own photographic business she uses 20,000 of her own saving to help start the business savings that had been providing her a returnn of 1,000 per year. over her first year in business connie collect total revenue of 180,000 and must cover explicit cost of 105,000 during her first year in business connie 's accounting profit is and her economic profit is a.75,000 , -16,000 b.110,000; 4,000 c.110,000; -16,000 d. 75,000; 4,000
Bakery produces and sells grain bread. Monthly fixed costs are known, costs of raw materials and direct labour needed to bake one bread are given below as well. Calculate costs of raw material and direct labour needed to produce more pieces of bread. Then calcuate VC, TC, AC and MC. Quantity Fixed costs (EUR) Raw material costs (EUR) Direct labour costs (EUR) Variable costs (EUR) Total costs (EUR) Average costs (EUR) Marginal costs (EUR) 1 500.00 0.20 1.00 1.20 501.20 501.20 1.20 5 500.00 1.00 5.00 6.00 506.00 101.20 1.20 10 500.00 2.00 10.00 12.00 512.00 51.20 1.20 15 500.00 3.00 15.00 18.00 518.00 34.53 1.20 35 500.00 7.00 35.00 42.00 542.00 15.49 1.20 50 500.00 10.00 50.00 60.00 560.00 11.20 1.20 100 500.00 20.00 100.00 120.00 620.00 6.20 1.20 1,000 500.00 200.00 1,000.00 1,200.00 1,700.00 1.70 1.20 2,500 500.00 500.00 2,500.00 3,000.00 3,500.00 1.40 1.20 10,000 500.00 2,000.00 10,000.00 12,000.00 12,500.00 1.25 1.20
derivative of the firm's profit function is F′(x) = −0.03x2 + 3x - 100, where x ≥ 0 is the output level. How should the company operate now
Gomez runs a small pottery firm. He hires one helper at $12000 per year, pays annual rent of $5000 for his shop and spends $20000 per year on materials. He has $40000 of his own funds invested in equipment that could earn him $4000 per year if alternatively invested. he has been offered $15000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3000 per year. Total annual revenue from pottery sales is $72000. calculate the accounting profit and economic for Gomez pottery firm.
Let's assume that a firm's total weekly costs are as follows: 1. Salaries = $5000. 2. Supplies = $1000. 3. Rent = $600. In addition, the owners have invested $30,000 of their own money into the business. This could have earned them interest of $100 per week if they had chosen to put it into a bank instead of investing it into their business. If the firm has weekly revenue of $20,000, the firm's accounting profit is ____________, and the economic profit is _____________. Loss of $18,987; profit of $5,690 Loss of $16,600; loss of $16,700. Loss of $16,700; loss of $16,600. $13,300; $13,400. $13,400; $13,300.