5. Last year, Jarod left a job that pays $60,000 to run his own bike-repair shop. Jarod's shopcharges $65 for a repair, and last year the shop performed 3,000 repairs. Jarod'sproduction costs for the year included rent, wages, and equipment. Jarod spent $50,000 onrent and $100,000 on wages for his employees. Jarod keeps whatever profit the shop earns, butdoes not pay himself an official wage. Jarod used $20,000 of his savings to buy a machine for theinimobusiness. His savings were earning an annual interest rate of 5 percent.a. What is Jarod's annual accounting profit?72hesyou'l awoda woled surgit odTasoda zozotontuner TRW001 vone Tun node odi ni esvus todel to touborq sovs bus todel to souborg lanigramab. What is Jarod's annual economic profit?to vy(tout

Answered: 5. Last year, Jarod left a job that…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. Last year, Jarod left a job that pays $60,000 to run his own bike-repair shop. Jarod's shop
charges $65 for a repair, and last year the shop performed 3,000 repairs. Jarod's
production costs for the year included rent, wages, and equipment. Jarod spent $50,000 on
rent and $100,000 on wages for his employees. Jarod keeps whatever profit the shop earns, but
does not pay himself an official wage. Jarod used $20,000 of his savings to buy a machine for the
inimo
business. His savings were earning an annual interest rate of 5 percent.
a. What is Jarod's annual accounting profit?
7
2hes
you'l awoda woled surgit odTasoda zozotontuner TRW001 vone T
un node odi ni esvus todel to touborq sovs bus todel to souborg lanigrama
b. What is Jarod's annual economic profit?
to vy
(tout

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Explicit expenses are determined whenever a direct payment is made during an economic transaction (such as paying employees' salary or landlords' rent). Implicit Costs: An implicit cost is any expense that doesn't always appear as an expense in the books but is nonetheless incurred as a result of what must be given up in order to engage in particular economic activity.

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