Suppose a farmer in Georgia begins to grow peaches He uses $1,000,000 in savings to purchase land, he rents equipment for $70,000 a year, and he pays workers $100,000 in wages In return, he produces 200,000 baskets o peaches per year, which sell for $3.00 each Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit?

Suppose a farmer in Georgia begins to grow peaches He uses $1,000,000 in savings to purchase land, he rents equipment for $70,000 a year, and he pays workers $100,000 in wages In return, he produces 200,000 baskets o peaches per year, which sell for $3.00 each Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section16.1: Interest

Problem 4ST

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Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $60,000 a year, and he pays workers $110,000 in wages. In return, he produces 150,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $. (Enter your response as an integer.) What is the farmer's accounting profit? The peach farmer earns accounting profit of $ (Enter your response as an integer.)
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