Farmer McDonald opportunity cost , accounting profit and economic profit.

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Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred?What cost would his accountant measure? If these seeds yield $200 worth of crops, doesMcDonald earn an accounting profit? Does he earn an economic profit?

Answer 1

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Chapter 13.1, Problem 1QQ

To determine

Farmer McDonald opportunity cost, accounting profit and economic profit.

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Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred?What cost would his accountant measure? If these seeds yield $200 worth of crops, doesMcDonald earn an accounting profit? Does he earn an economic profit?

Which of the following profits represent economic profit? Choose all that apply. a. Your company sells 1,000 cars per month. Each car costs $20,000. Your cost for parts is $4 million. Your labor costs are $3 million. Your total profit is $13 million. b. During the summer, you make ten go-karts and sell each one for $100. It costs you $200 in supplies. You could have made $500 during the summer if you had chosen to deliver phone books. Your total profit is $300. c. A restaurant makes $10,000 per month in total revenue. Supplies cost $2,000 per month, and labor costs are $3,000 per month. The restaurant's profit is $5,000. d. A high-end airplane company sells five private jets per year. Each jet is sold for $10 million. The profit margin is 12 percent. If you were to change course and make yachts with the same available resources, you would make no additional profit.

Farmer McDonald's gives banjo lessons for $20 an hour. One day, He spends 10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred? what cost with his account in Measure? If these seeds yield $200 worth of crops, Does McDonald earn an accounting profit