Gomez runs a small pottery firm. She hires one helper at $12, 000 per year,pays annual rent of $5,000 for her shop, and spends $20,000 per year onmaterials. She has $40,000 of her own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn her $4,000 per year ifalternatively invested. She has been offered $15,000 per year to work as apotter for a competitor. She estimates her entrepreneurial talents are worth$3,000 per year. Total annual revenue from pottery sales is $72,000.Calculate the accounting profit and the economic profit for Gomez's potteryfirm. LO9.1

The objective of the question is to calculate both the accounting profit and the economic profit for…

Answered: Gomez runs a small pottery firm. She…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Chris P. Nugget runs a small fast-food chicken restaurant named "Poultrygeist.". He hires one employee at a cost of $28,000 per year, pays annual rent of $25,000 for his shop, and spends $75,000 per year on other inputs (food, supplies, etc.). He has $100,000 of his own funds previously invested in equipment (ovens, serving counters, etc.) that could earn him $8,000 per year if these funds were alternatively invested. Chris has been offered $80,000 per year to work as a restaurant manager for a competitor. Total annual revenue from the restaurant is $200,000. For all answers, be specific and show your work. a. How much are Mr. Nugget's "explicit costs" this year? b. How much are Mr. Nugget's "implicit costs" this year? c. What is Mr. Nugget's "accounting profit" this year? d. What is Mr. Nugget's "economic profit" this year? e. Put into words what your answer to part d. means for Mr. Nugget's decision about whether to stay at his restaurant or to close and take the offer at his…
The law of diminishing returns states that if increasing quantities of a variable factor are appliedto a given quantity of fixed factors, then
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Please summarize this
Am I solving correctly? I don’t really remember how to derive the AC equation or graph these values that I have found.
What is the trend in cost?
The Cobb-Douglas production function for a particular product is N(x,y) = 80x0.6.0.4, where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product. Each unit of labor costs $40 and each unit of capital costs $60. Answer the questions (A) and (B) below. (A) If $150,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maximum production. (B) Find the marginal productivity of money in this case, and estimate the increase in production if an additional $50,000 is budgeted for the production of the product. C (A) If $150,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maximum production. Production will be maximized when using units of labor and units of capital.
definition of economic costs
Barney decides to quit his job as a corporate accountant, which pays $12,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $315 a month if he wasn’t using it as a home office. He must purchase office supplies worth $85 a month, and his monthly electricity bill has increased by $40 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $17,000 per month. Instructions: Enter your answers as a whole number. a. What are Barney’s monthly explicit costs? $ b. What are Barney’s monthly implicit costs? $ c. What are Barney’s monthly economic costs? $
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Michael runs a small pottery firm. He hires one helper at $14,000 per year, pays annual rent of $8,000 for his shop, and spends $24,000 per year on materials. He has $50,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $7,500 per year if alternatively invested. He has been offered $35,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $4,000 per year. Total annual revenue from pottery sales is $75,000. Michael's accounting profit is $. (Enter your response rounded to the nearest dollar and include a negative sign if necessary.)
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