Question

Explain how to get $6000 please

Jon Brooks quit his job in a bicycle shop, where he earned $15,000 per year, to become a graduate student in economics. At the university he attended, he spent $2,000 on books, $1,000 on cough medicine, and earned $12,000 as an economics instructor per year. What were Jon's economic costs for a year while attending college? Multiple Choice $18,000 $15,000 $6,000 $3,000

Answer 1

Answer

$6000

Explanation

Economic cost includes explicit cost ans well implicit cost. If he don't quit job he could earn that $15000. So $15000 will be his opportunity cost or implicit cost.

And he spent $2000 on books and $1000 on cough medicine. This cost are explicit cost.

So total coat will be $15000+$2000+$1000

=$18000.

He earn $12000 so total cost is =cost - income

=18000-12000=$6000.