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

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