Question

Please help me in both questions, thank you very much :)

QUESTION 3 Ben is a musician who has just finished his degree in music technology. He is currently deciding whether or not to accept a job in Brisbane as a music teacher at a local school, or focus on being a touring musician. He ill earn a wage of $35,000/year as a teacher in Brisbane, and $25,000/year as a touring musician based in Melbourne. Rent is $10,000lyear in Brisbane, but only $5,000/year in Melbourne. Assume touring accommodation costs are $0 as the tour provides free accommodation for musicians. However, if Ben decides to stay in Brisbane, he will spend $2,000/year on travelling to visit his friend in Melbourne Select the item from the list provided to make the following statements true: By taking the teacher job in Brisbane, 1. Accounting profit 2. -$2000/year Ben will earn an compared to touring of S3000 3. Total cost 4. Economic profit 5. Economic loss 6. A normal profit 7. $12000/year 8. $33000/year 9. Explicit cost Ben's explicit costs for choosing to take the teaching job in Brisbane are For Ben to be indifferent, from an economists point of view between 10. $45000/year teaching and touring, he would need to 11. $1900 make option. when choosing either 12. Implicit cost

Answer 1

Answer:

Question 4)

A) Economic Profit of $3000.

Since accounting profit= Total Salary from teaching job- Explicit cost

Normal profit = Total salary from From teaching -Total actual expenditure for living in brisbane-Implicit cost

Implicit cost=Total salary from From touring -Total actual expenditure for living in melbourne=25000-5000=20000

Normal profit =35000-(10000+2000)-20000=$3000

Since normal Profit is greater than Zero so it is economic profit.

B) $12000/year

Explicit cost for teaching job= rental Expenses+ travelling Expenses=10000+2000=$12000/year

c) Normal Profit

Normal Profit occur when Total salary = Total explicit cost+ Implicit cost and

which means Normal Profit =0 so Ben will be indifferent while choosing job.