Microeconomics Jon quit his job as a manager at West End Savings bank where he earned $112,000 a year. He cashed in $214,000 in corporate bonds that earned 1.0% interest annually to set up a gym. Jon has decided to buy a store front and set up exercise classes. There are 1400 people who will pay $1200 a year for unlimited classes; $850 from each person goes for instructors, maintenance, equipment, insurance, depreciation etc. Write the answers to the following questions on the answer sheet. (You must show your work.) A.What are Jon’s total revenues? B. What are Jon’s explicit costs? In numbers C.What is his accounting profit? in numbers D. List 2 (in numbers) 2 implicit costs that Jon has not included. E. What is Jon’s pure economic profit (or loss) in numbers?
Microeconomics Jon quit his job as a manager at West End Savings bank where he earned $112,000 a year. He cashed in $214,000 in corporate bonds that earned 1.0% interest annually to set up a gym. Jon has decided to buy a store front and set up exercise classes. There are 1400 people who will pay $1200 a year for unlimited classes; $850 from each person goes for instructors, maintenance, equipment, insurance, depreciation etc. Write the answers to the following questions on the answer sheet. (You must show your work.) A.What are Jon’s total revenues? B. What are Jon’s explicit costs? In numbers C.What is his accounting profit? in numbers D. List 2 (in numbers) 2 implicit costs that Jon has not included. E. What is Jon’s pure economic profit (or loss) in numbers?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Jon quit his job as a manager at West End Savings bank where he earned $112,000 a year. He cashed in $214,000 in corporate bonds that earned 1.0% interest annually to set up a gym. Jon has decided to buy a store front and set up exercise classes. There are 1400 people who will pay $1200 a year for unlimited classes; $850 from each person goes for instructors, maintenance, equipment, insurance,
Write the answers to the following questions on the answer sheet. (You must show your work.)
A.What are Jon’s total revenues?
B. What are Jon’s explicit costs? In numbers
C.What is his accounting profit? in numbers
D. List 2 (in numbers) 2 implicit costs that Jon has not included.
E. What is Jon’s pure economic profit (or loss) in numbers?
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D. List 2 (in numbers) 2 implicit costs that Jon has not included.
E. What is Jon’s pure economic profit (or loss) in numbers?
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