Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2P
Subpart (a):
To determine
The opportunity cost of becoming an entrepreneur.
Subpart (b):
To determine
The opportunity cost of becoming an entrepreneur.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Tamika, a young entrepreneur, has been purpose-driven toward social change in their rural community. They have created solutions for pesticide runoff, erosion problems, and toxic well water. Tamika has decided to focus more on energy conservation and local air quality. Their first client is interested in wind as a power source. Tamika is unfamiliar with wind power and needs to learn about innovative solutions for residential application. How might Tamika use creative problem solving methods to develop solutions for the client’s request?
You are a manager at Glass Incorporated—a mirror and window supplier. Recently, you conducted a study of the production process for your single-side encapsulated window. The results from the study are summarized in the following table and are based on the 8 units of capital currently available at your plant. Each unit of labor costs $60, each unit of capital is $20, and your encapsulated windows sell for $12 each. Given this information, what is your optimal labor and output decision?Labor: Output: Given these decisions, what will be your profit?$
(1)Labor L
(2)Capital K
(3)Output Q
0
8
0
1
8
10
2
8
30
3
8
60
4
8
80
5
8
90
6
8
95
7
8
95
8
8
90
9
8
80
10
8
60
11
8
30
Anna spends Php400,000 per year on painting supplies and storage space. She recently received two (2) job offers from a famous marketing firm – one offer was Php150,000 per year and the other was Php100,000 per year. However, she turned both jobs down to continue a painting career. If Ann sells 45 painting per year at a price of Php10,000 each:
What are her economic profits?
Chapter 2 Solutions
Economics (Irwin Economics)
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
Knowledge Booster
Similar questions
- SITUATION: You are thinking about becoming a Paradise Coffee franchisee. Franchisees are offered a business specializing in producing an exclusive line of exotic coffee drinks (similar to Starbucks). Franchisees have had good success in towns without a Starbucks (Paradise franchises gross $220,000 sales on average per year, and you believe you can gross as much, too). You will have to pay Paradise Coffee, Inc., a franchise fee of $3,000 a year plus 2.5% of gross sales. You will also pay an annual National advertising fee of 3% of gross sales. Paradise requires that you use their logo-imprinted goods (plates, cups, napkins). They are purchased in bulk from Paradise and will cost you $40,000 per year. You also have to use their special Paradise Roast coffee beans, which cost $12.00 per pound. You estimate you will use 400 pounds of beans a year. Other food ingredients (syrups, biscotti, whipped cream, soft drinks, etc) will cost $18,000 a year. You will have to hire three…arrow_forwardJamie is considering leaving her current job, which pays $75,000 per year, to start a new company that develops applications for smartphones. Based on market research, she can sell about 50,000 units during the first year at a price of $4 per unit. With annual over-head costs and operating expenses amounting to $145,000, Jamie expects a profit "margin of 20 percent. This margin is 5 percent larger than that of her largest competitor, Apps Inc. a. If Jamie decides to embark on her new venture, what will her accounting costs be during the first year of operation? Her implicit costs? Her opportunity costs? b. Suppose that Jamie’s estimated selling price is lower than originally projected during the first year. How much revenue would she need in order to earn positive account-ing profits? Positive economic profits? 2. Approximately 14 million Americans are addicted to drugs and alcohol. The federal government estimates that these addicts cost the U.S. economy $300 billion in…arrow_forwardYour business produces two products: graphics and writing assessments. However, time is finite and your business must allocate its time between the two products. If your business is producing one service, it cannot produce the other service at the same time. Based on previous experience, you know that your firm can produce 11 graphics and 20 assessments per day. Your firm could also produce 7 graphics and 40 assessments per day. Given these production possibilities, what is the tradeoff between your two services? Make sure you estimate your tradeoff (opportunity cost) in terms of how much you receive for each unit of graphics services that you give up, that is, for 1 unit of graphics given up, how many units of assessments do you gain? Make sure to express your answer to the first decimal point.arrow_forward
- A Flexible Savings Account (FSA) plan allows you to put money into an account at the beginning of the calendar year that can be used for medical expenses. This amount is not subject to federal tax. As you pay medical expenses during the year, you are reimbursed by the administrator of the FSA until the money is exhausted. From that point on, you must pay your medical expenses out of your own pocket. On the other hand, if you put more money into your FSA than the medical expenses you incur, this extra money is lost to you. Your annual salary is $80,000 and your federal income tax rate is 30%. [1] Assume that your medical expenses in a year are normally distributed with mean $2000 and standard deviation $500. Build an @RISK model in which the output is the amount of money left to you after paying taxes, putting money in an FSA, and paying any extra medical expenses. Experiment with the amount of money put in the FSA, using a RISKSIMTABLE function. [2] Rework part a, but this time assume…arrow_forwardPaolo lives in Philadelphia and operates a small company selling scooters. On average, he receives $712,000 per year from selling scooters. Out of this revenue from sales, he must pay the manufacturer a wholesale cost of $412,000. He also pays several utility companies, as well as his employees wages totaling $269,000. He owns the building that houses his storefront; if he choose to rent it out, he would receive a yearly amount of $1,000 in rent. Assume there is no depreciation in the value of his property over the year. Further, if Paolo does not operate the scooter business, he can work as a nurse and earn a yearly salary of $21,000 with no additional monetary costs, and rent out his storefront at the $1,000 per year rate. There are no other costs faced by Paolo in running this scooter company. (Questions in images)arrow_forwardYour answer is partially correct. A state department of health is considering a public awareness campaign to encourage vaccination. It determines that the cost of this campaign would be $760,000 per year for the next 6 years. It estimates that the campaign would reduce rates of illness and communicable disease. At the end of the first year of the campaign, the resulting savings would be $1,150,000; the savings would decrease by $120,000 each of the following 5 years. Assuming a discounting factor of 8%, compute the benefit cost ratio. Click here to access the TVM Factor Table calculator. Yes Carry all interim calculations to 5 decimal places and then round your final answer to two decimal places. The tolerance is ±0.01. Would you recommend the department of health launch the public awareness campaign? 1.05 eTextbook and Media Hint Assistance Used Assistance Used Draw the cash flows of both the benefits and the costs. Use these to compute the present worth of both the benefits and the…arrow_forward
- If You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. then a yearly normal return for your computer software fırm would be: Select one: a. 40,000 O b. 20,000 O c. 80,000 O d. 90,000 O e. 60,000arrow_forwardYou are serving as the chair for your community's annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers, and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money but to prompt awareness. As the chair you set a financial goal to break even on the one and only cost of the event: a fitness bag with the community seal and the event motto, "I AM ON THE RIGHT TRACK!" Round to the table standard. Complete the calculations for Average Variable Cost: Q2 Table Bags/ Participants Fixed Cost Variable Cost Total Cost Average Variable Cost Marginal Cost Total Revenue wt Price $20 Marginal Revenue Total Profit 0 1700 0 1700 0 -1700 100 1700 500 2200 3a 2000 20 -200 200 1700 1200 2900 3b 4000 20 1100 300 1700 2700 4400 3c 6000 20 1600 400 1700 5200 6900 3d 8000 20 1100 500 1700 9000 10700 3e 10000 20 -700 600…arrow_forwardYou are a college sophomore who tutors fellow classmates in your free time for extra money. With your current abilities, you can earn $2,000 per year for the next three years from tutoring. However, suppose you have the option of enhancing your ability to tutor by acquiring special training for $6,000. After paying the fee, the training takes two years to complete, but at the end of this training period, you can earn $13,000 tutoring during the third year. While training in your free time, you are unable to continue tutoring. At what discount rate would you be indifferent between acquiring and not acquiring the training? You would be indifferent if the discount rate were percent. (Enter a numeric response rounded to two decimal places.)arrow_forward
- You are serving as the chair for your community’s annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers, and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money but to prompt awareness. As the chair you set a financial goal to break even on the one and only cost of the event: a fitness bag with the community seal and the event motto, “I AM ON THE RIGHT TRACK!" Bags/Participants Fixed Cost Variable Cost Total Cost Average Variable Cost Marginal Cost Total Revenue wt Price $20 Marginal Revenue Total Profit 0 1700 0 1700 0 -1700 100 1700 500 2200 a 3a 2000 20 -200 200 1700 1200 2900 b 3b 4000 20 1100 300 1700 2700 4400 c 3c 6000 20 1600 400 1700 5200 6900 d 3d 8000 20 1100 500 1700 9000 10700…arrow_forwardSuppose you buy an accessory that will be used in your production activity and is worth a thousand of pesos (P1,000.00). In economic perspective, would you contend that is the only cost involved? Why or why not?arrow_forwardKim works as a physiotherapist. She currently earns a salary of $6479 per month. The only costs associated with working as a physiotherapist are fixed costs (e.g. maintaining her licence to practice physiotherapy) of $289 per year. Due to changes in the health care sector, Kim is deciding whether she should become a general practitioner instead. She estimates her salary as a general practitioner will be $8563 per month. What is Kim's monthly economic loss from working as a physiotherapist? Assume the same fixed costs apply to both the physiotherapist and general practitioner options, because the licences for physiotherapists and general practitioners cost the same amount of money. Answer as a positive number to the nearest whole value (with no decimal places, $or - signs, spaces or commas).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education