Principles of Microeconomics
8th Edition
ISBN: 9781337470384
Author: N. Gregory Mankiw
Publisher: Cengage Learning US
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Question
Chapter 13, Problem 2PA
Subpart (a):
To determine
An opportunity cost of running the hardware store.
Subpart (b):
To determine
An opportunity cost of running the hardware store.
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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. What is your aunt’s opportunity cost of running a hardware store for a year? If your aunt thinks she can sell $510,000 worth of merchandise in a year, should she open the store? Explain.
Georgia quit her old job where she had been earning $50,000 a year to start her own business. She also invested all her savings into the
business, which had been earning $10,000 a year in interest. At the end of her first year, Georgia's accountant told her she had made
$70,000 in accounting profit. An economist would have told her she made an economic profit of:
of
Select one:
a. $10,000
b. zero
c. - $15,000
d. $20,000
Tim is thinking of opening a garment store. He estimates that it would cost $270000 per
year to rent the location and buy the merchandise. In addition, he would have to quit his
$63000 per year day job. Tim estimates he can sell $315600 worth of garments in a year.
a. What will be the accounting profit and economic profit for Tim?
b. If you are an economist, should you suggest opening the store? Why?
Chapter 13 Solutions
Principles of Microeconomics
Ch. 13.1 - Prob. 1QQCh. 13.2 - Prob. 2QQCh. 13.3 - Prob. 3QQCh. 13.4 - Prob. 4QQCh. 13 - Prob. 1CQQCh. 13 - Prob. 2CQQCh. 13 - Prob. 3CQQCh. 13 - Prob. 4CQQCh. 13 - Prob. 5CQQCh. 13 - Prob. 6CQQ
Ch. 13 - Prob. 1QRCh. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QRCh. 13 - Prob. 8QRCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - Prob. 6PACh. 13 - Prob. 7PACh. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PA
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