Helen has just graduated from SFA with a degree in accounting and received two job offers: one from Deloitte with salary $105,000 per year, and the other from KPMG for $85,000. But Helen rejected both offers and stayed in East Texas to pursue her passion of teaching others to ride horses. She spends $25,000 per year on feed and supplies for her horses. Suppose Helen has 30 clients per year who each pay her $8,000 for a year of ridin lessons. a. What are her accounting profits? b. What are her economic profits?
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- In the quaint village of Chromaville, all of the residents (including their mayor) are colorblind. The mayor is decorating all the village's lampposts before their annual year-end holiday parade. She has $180 to spend on ribbon. A yard of green ribbon costs $1.50 (per yard). A yard of red ribbon costs $1.25. However, there is a sale on this week: If you buy two yards of green ribbon at the regular price, you get an additional yard of green ribbon for free! a. If yards of red ribbon are measured along the horizontal axis and yards of green ribbon are measured along the vertical axis, what is the slope of the mayor's budget constraint (during the sale)? b. What is the slope of the mayor's indifference curves (if she cannot tell the difference between red and green ribbon)? C. How many yards of red and green ribbon will the mayor purchase (during the sale)?QUESTION 9 George runs a very large confectionary factory where he makes all kinds of products including chocolate, toffee, and fudge, for the export market. Hector runs a doctor's practice next to this facility. Currently, George's factory machinery produces a substantial amount of noise, which is making it difficult for Hector to properly focus when he is treating a patient. This situation is causing Hector great distress, and, spurred on by his varying attentiveness and the annoyance of the noise itself. patients are also starting to seek medical care elsewhere. Hector therefore wishes to come to an agreement with George to stop him from using hist machinery during times when he should be the busiest with patients at his practice. Their respective benefits are shown below: Gains to George ($) Gains to Hector ($) Total ($) No Noise Controls 800 250 1050 Noise Controls 500 566 George insists that Hector will need to pay him exactly half the extra benefits that Hector gains from the…Shannon is the mother of a 3-year old. She currently stays home with her child. Before giving birth, Shannon worked as a marketing consultant making $36,000 annually. The cumulative opportunity cost of Shannon's decision to stay at home with her child is $ Shannon is offered a position with a marketing company that pays $36,000 annually. However, Shannon would need to spend an additional $1,500 per month for day care services for her child. The annual opportunity cost of Shannon turning this job down is $
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- The company that you manage has already spent $5 million on developing a new product-a website that combines You Tube, Twitter, and Facebook - called You Twit Face. The development is not quite finished. It will cost an extra $6 million to finish development and complete the product. Assume that this $6 million amount includes the explicit costs and any opportunity cost that the company may have. At a recent meeting, your salespeople report that the expected sales of your new product (if you finish) are $10 million total. If you do not finish developing the product you can sell the incomplete product to another company for $3 million. What is the MC of finishing the development? What is the MB of finishing the development? Should you finish the product? Why or why not? Use the idea of "thinking at the margin" to explain your answer. Thank uMany police officer positions require the applicant to have a college degree, even though the tasks of a police officer rarely call upon college course material. Suppose two individuals who do not have college degrees are considering applying to the police force. Ginny is considering applying for an officer position and plans on working for the police force for a period of time, over which she would earn approximately $500,000 (in present discounted value) in earnings while in the position. Kenji is also considering applying, and plans on working as an officer for a period of time, over which he would earn approximately $10,000 (in present discounted value) in lifetime earnings while in the position. Also suppose that present value of obtaining a college degree, which is required to submit a job application to the police department, is $100,000. Use the following table to indicate whether each individual would likely apply, or not, given the cost of obtaining a college degree.…When real estate agents sell their own, rather than clients', houses, they leave the houses on the market for a longer time (10 days longer on average) and wind up with better prices. Suppose that real estate agents earn a commission equal to 3% of the sale value of each house that they help sell. Suppose a real estate agent has an offer on a house of $600,000. The agent can get a 4% higher offer with more effort and by leaving the house on the market for a few more weeks. If the agent sells the house now, she will earn a commission of . By keeping the house on the market and expending more effort to sell the house, the agent can earn a commission of . Thus, the agent gains for the extra effort and time of keeping the house on the market. Suppose a real estate agent has an offer on a house that she owns. The agent has a current offer of $600,000, but can get a 4% higher offer with more effort and by leaving the house on the market for a few more weeks. Assume that all of…