Jane grows apples on land she inherited from her grandmother. She incurs explicit costs of $120 for the trees and $30 for fertilizers. In addition, suppose her land is otherwise worth $9,000 and her labor is worth $35,000 (this is the amount she could earn managing someone else's land instead of her own).
The market price of apples is 21 per box. If at this price Jane produces 2,500 boxes of apples, then her economic profit is _____
Suppose all apple farmers have the same cost structure in the long run. If so, then farmers will ____ the apple market
- Exit
- Enter
Explicit cost incurred by Jane = Cost on tress + Cost for fertilizer = $120 + $30 = $150
Land worth = $9000
Labor worth = $35000
If he produces apples on her inherited land total revenue she gets = Market price of apples per box * Total boxes produced
= $21 * 2500 = $52500
Total cost she incurs in apple production = explicit costs incurred plus opportunity cost of land and her labor worth
= $150 + $9000 + $35000 = $44150
Profit she gets = $52500 - $44150 = $8350
Since the farmer is getting a positive profit from production of apples on her field rather than working on someone else field. Farmers will enter the apple production market if all farmers will have same same cost structure in future.
Jane grows apples on land she inherited from her grandmother. She incurs explicit costs of $120...
Ten years ago, Ginny inherited $45,000 from her grandmother. She decided to invest all of this money in GE stock. Suppose she decides to sell the stock today so she can purchase her first home. The sale price of the stock is $57,500. Calculate the size of Ginny's taxable capital gain. taxable capital gain _______ Suppose that at the beginning of the ten year period the Consumer Price Index (CPI) was 125 and today the CPI is 215. Use this...