Suppose you work hard building your business and end up earning zero economic profit for the...
Homework Answers
No, from the economist point of view, this cannot be considered as the failure because zero economic profit means that the business is able to cover the variable cost. The business will be considered a failure if someone is not able to cover the variable cost. Zero economic profit means that the business has covered all the cost incurred during the business activities.
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Suppose you work hard building your business and end up earning
zero economic profit for the...
Why does it always make economic sense for you to start a business if your business ca...
Why does it always make economic sense for you to start a business if your business can make economic profit. How does economic profit differ from accounting profit? Have you ever considered starting a business? If you were to start your own business someday, describe the revenues and costs you would consider (make sure you are describing economic profit in your analysis). please type answer
(Figure #3) You are working as an economist at a consulting firm earning $60,000 per year....
(Figure #3) You are working as an economist at a consulting firm earning $60,000 per year. The next best alternative would be opening your own window-cleaning business. In the business, your revenue would be $100,000 per year. Additionally, you would spend $20,000 on supplies and marketing, and $10,000 per year on payments for a van that would be used in the business. From the previous calculations of Accounting Profit, Economic Profit, and Opportunity Cost, the best alternative is to: Select...
3) Suppose a perfectly competitive firm is earning a positive economic profit. Show this situation in...
3) Suppose a perfectly competitive firm is earning a positive economic profit. Show this situation in a graph. What will happen to economic profits in the long run? Show this situation in a graph. As profits are driven to zero, what happens to consumer surplus? a. b.
Suppose that you open your own business and eam an accounting profit of $35,000 per year....
Suppose that you open your own business and eam an accounting profit of $35,000 per year. When you started your business, you left a job that paid you a $30,000 salary annualy. Also, suppose that you invested $70,000 of your own funds to start up your business. If the normal rate of return on capital is 10 percent, your economic profit is O A, -$5,000. O B. $5,000. C.-$2,000 D. $2,000
Consider a short-run PC market where firms are earning positive economic profit. In the long-run, we...
Consider a short-run PC market where firms are earning positive economic profit. In the long-run, we would expect: Firms to enter this market, drive price down, and earn zero economic profit Firms to enter this market, drive price down, and keep economic profit just above zero Firms to exit this market searching for higher profit, driving price up and increasing profit for the firms that stay Firms to exit this market searching for higher profit, driving price down and decreasing...
[3] Suppose your aunt has just closed her books from her first year in the retail...
[3] Suppose your aunt has just closed her books from her first year in the retail cookie business and is ecstatic with the profit her accountant says she has earned. Her business earned $115,000 in sales revenue over the year, and its costs for rent, raw materials, electricity, and the like were $80,000. Your uncle is not quite as elated, but can't figure out exactly why. In discussing the situation with you (the family economist), he offers the following information....
4 questions MICROECONOMICS ECONOMIC VS. ACCOUNTING PROFITS - HOMEWORK BSE 2212 2) Chapter 9 #1. Gomez...
4
questions
MICROECONOMICS ECONOMIC VS. ACCOUNTING PROFITS - HOMEWORK BSE 2212 2) Chapter 9 #1. Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if has been offered $15,000 per year to work as a potter for...
Draw a diagram showing a competitive firm operating with zero economic profit where P = LAC....
Draw a diagram showing a competitive firm operating with zero economic profit where P = LAC. If the price fell slightly, would the firm immediately go out of business? Why or why not? If only one firm is producing a particular product, we know that price will be above marginal cost. True or false? Explain.
15. Integrating Problem Samantha Roberts has a job as a pharmacist earning $30,000 per year, and...
15. Integrating Problem Samantha Roberts has a job as a pharmacist earning $30,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $40,000 per year or to purchase a pharmacy that generates a revenue of $200,000 per year. To purchase the pharmacy, Samantha would have to use her $20,000 savings and borrow another $80,000 at an interest rate of 10 percent per year. The pharmacy that Samantha is contemplating purchasing has...
17. The market is perfectly competitive and your business is considered to be profit maximizing. Your...
17. The market is perfectly competitive and your business is considered to be profit maximizing. Your business earns economic profits of $1500. The foxed costs of your business decrease from $500 to $450. This means your business will b C a reduce its output raise is price eam a greater profil d. earn a smalier profit 18. Sebastian has the choice of working as a grocery store stocker ($12/hour) or washing windows for local businesses ($4 per window). He doesn't...
(Figure #3) You are working as an economist at a consulting firm earning $60,000 per year. The next best alternative would be opening your own window-cleaning business. In the business, your revenue would be $100,000 per year. Additionally, you would spend $20,000 on supplies and marketing, and $10,000 per year on payments for a van that would be used in the business. From the previous calculations of Accounting Profit, Economic Profit, and Opportunity Cost, the best alternative is to: Select...
3) Suppose a perfectly competitive firm is earning a positive economic profit. Show this situation in a graph. What will happen to economic profits in the long run? Show this situation in a graph. As profits are driven to zero, what happens to consumer surplus? a. b.
Suppose that you open your own business and eam an accounting profit of $35,000 per year. When you started your business, you left a job that paid you a $30,000 salary annualy. Also, suppose that you invested $70,000 of your own funds to start up your business. If the normal rate of return on capital is 10 percent, your economic profit is O A, -$5,000. O B. $5,000. C.-$2,000 D. $2,000
[3] Suppose your aunt has just closed her books from her first year in the retail cookie business and is ecstatic with the profit her accountant says she has earned. Her business earned $115,000 in sales revenue over the year, and its costs for rent, raw materials, electricity, and the like were $80,000. Your uncle is not quite as elated, but can't figure out exactly why. In discussing the situation with you (the family economist), he offers the following information....
4
questions
MICROECONOMICS ECONOMIC VS. ACCOUNTING PROFITS - HOMEWORK BSE 2212 2) Chapter 9 #1. Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if has been offered $15,000 per year to work as a potter for...
Draw a diagram showing a competitive firm operating with zero economic profit where P = LAC. If the price fell slightly, would the firm immediately go out of business? Why or why not? If only one firm is producing a particular product, we know that price will be above marginal cost. True or false? Explain.
15. Integrating Problem Samantha Roberts has a job as a pharmacist earning $30,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $40,000 per year or to purchase a pharmacy that generates a revenue of $200,000 per year. To purchase the pharmacy, Samantha would have to use her $20,000 savings and borrow another $80,000 at an interest rate of 10 percent per year. The pharmacy that Samantha is contemplating purchasing has...
17. The market is perfectly competitive and your business is considered to be profit maximizing. Your business earns economic profits of $1500. The foxed costs of your business decrease from $500 to $450. This means your business will b C a reduce its output raise is price eam a greater profil d. earn a smalier profit 18. Sebastian has the choice of working as a grocery store stocker ($12/hour) or washing windows for local businesses ($4 per window). He doesn't...
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