Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $100,000 a year, and he pays workers $110,000 in wages. In return, he produces 200,000 baskets of peaches per year, which sell for$3.00 each. Suppose the interest rate on savings is 1 percent and that the farmer could otherwise have earned $45,000 as a shoe salesman.What is the farmer's economic profit?The peach farmer earns economic profit of S (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.)

Solution: Given Data: cost of land purchased = $1,000,000 Rent on equipment = $100,000 Wages paid =…

What is the farmer's economic profit? The peach farmer earns economic profit of S (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.)

What is the farmer's economic profit? The peach farmer earns economic profit of S (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.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A10
Suppose you own an acre of land. You could grow crops on that land. The cost of seeds is $100. The crops you grow from those seeds will sell for $350. You could also rent the land to another farmer. The rent you could eam is $300. Calculate your economic profit. (Do not include a $ sign in your answer.) Answer: Suppose the total cost function for a firm is given by: TC= 100 + 2q +0.5q2. Find the marginal cost function and then use that to determine the marginal cost of the 10th unit. (Do not include a $ sign in your response.) # Answer:
Calculate Iyana's marginal revenue and marginal cost for the first seven rompers they produce, and plot them on the following graph. Use the blue points (circle symbol) to plot marginal revenue and the orange points (square symbol) to plot marginal cost at each quantity. COSTS AND REVENUE (Dollars per romper) 40 35 30 25 20 15 10 0 0 1 2 3 4 5 6 7 8 QUANTITY (Rompers) Marginal Revenue Marginal Cost ? Iyana's profit is maximized when they produce a total of is $ , an amount rompers. At this quantity, the marginal cost of the final romper they produce than the price received for each romper they sell. At this point, the marginal cost of producing one more romper (the first romper beyond the profit maximizing quantity) is $ , an amount than the price received for each romper they sell. Therefore, Iyana's profit-maximizing quantity occurs at the point of intersection between the Because Iyana is a price taker, the previous condition is equivalent to curves.
Only typed answer
For each price in the following table, use the graph to determine the number of lamps this firm would produce in order to maximize its profit. Assume that when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero lamps and the profit-maximizing quantity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will make a profit, suffer a loss, or break even at each price. Price (Dollars per lamp) 15 20 PRICE (Dollars per lamp 80 RS232 70 26 25 55 70 85 10 588 288 8 COSTS (Dolars) 20 On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve that corresponds to prices where there is positive output. (Note: You are given more points to plot than you need.) (? 10 0 10 D Quantity (Lamps) 0 0 Either 0 or 45,000 10 60,000 65,000 70,000 MC-D 20 D 20 30 40 50 60 75 NO QUANTITY (Thousands of…
Imagine a small juice producer named " Bilberry Infused Beverages" known for its refreshing beverages. The owner, Louis, keeps track of the production costs. Recently he decided to expand his operations and produce more Juices to meet the increasing demand. Table 15.1 below shows the data he has collected: Complete Table 15.1 below and use the information to answer the question that follows. Table 15:1 Production Costs for Bilberry Infused Beverages Output Total cost Fixed cost Variable cost Marginal Average cost cost Average fixed cost D 30 0 1 10 2 18 3 22 4 56 6 5 64 6 76 7 8 15 15 What is the marginal cost of producing the 8th unit of the good? a) 4 b) 10 12 d) 29
Farmer Brown grows blueberries. The average total cost, average variable cost, and marginal cost of growing blueberries for an individual farmer are illustrated in the graph to the right. Farmer Brown will incur losses if the market price falls below $ per crate. (Enter a numeric response using an integer.) Furthermore, farmer Brown should shut down in the short run if the market price falls below $ per crate. C Price and cost (dollars per crate) 40- 36- 32- 28- 24- 20- 16- 12- 8- 4 0 MC AT AVI 90 10 20 30 40 50 60 70 80 Quantity of blueberries (crates per week) 1
Suppose the cost of renting a snowy bus were to fall from $30 per hour to $20 per hour. What do you expect would happen in the short-run (stage 1 equilibrium) to (a) the number of cones produced by each snowy bus; (b) total production of cones in the market, and (c) economic profits of snowy bus businesses? Briefly explain (you don't need to do any calculations, just explain inwords).
Suppose a firm is able to sell their product for a price of $10. You have the following information on the firm's output and cost Output 500 $70 $100 Implicit Costs Explicit Costs Instructions: Enter amounts as a whole number. If the firm is earning a loss indicate with a negative sign (-). What is the firm's economic profit? $
pshotic 166& 5. Profit maximization and shutting down in the short run Suppose that the market for microwave ovens is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. 100 90 80 ATC 70 60 40 30 AVC 20 10 MC 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of ovens) Σ 50 PRICE (Dollars per oven)
What do economists call the sum of a firm's fixed costs and its variable costs? sunk cost marginal cost implicit cost total cost
Notes for graph: MC is marginal cost, MR is marginal revenue, ATC is average total cost, AVC is average variable cost and D is the demand curve. To maximize the profit, how many units should the firm produce? At what price? Based on your answer, what is the total revenue? Total costs? Total profit? Total fixed cost? Will you operate this firm in the short run? Long run? Briefly explain.