Jack decides to quit his job paying $28,000 a ycar and start his own business manufacturing and selling Extreme skatcboards. Jack invests $40,000 of his own moncy from his savings account, which had been carning him $2,000 in interest. The lease on the space Jack is renting costs him $10,000 a year. Jack's utilitics (water, clectricity, ctc.) cost him roughly $5,000 a year. The cost of buying the materials for the skateboards is $20,000 a year. To assist him in maintaining the store and production facility, Jack hires Sara, part-time, at a salary of $10,000 a ycar. Jack knows his labor, skills and knowledge (entreprencurial ability) of the skateboard industry is worth $10,000, Revenuc for Extreme skateboards was $85,000. Compute Jack's accounting profit and cconomic profit. Will Jack continuc to operate his own extreme sports shop or will he quit and do something clse? Explair
Jack decides to quit his job paying $28,000 a ycar and start his own business manufacturing and selling Extreme skatcboards. Jack invests $40,000 of his own moncy from his savings account, which had been carning him $2,000 in interest. The lease on the space Jack is renting costs him $10,000 a year. Jack's utilitics (water, clectricity, ctc.) cost him roughly $5,000 a year. The cost of buying the materials for the skateboards is $20,000 a year. To assist him in maintaining the store and production facility, Jack hires Sara, part-time, at a salary of $10,000 a ycar. Jack knows his labor, skills and knowledge (entreprencurial ability) of the skateboard industry is worth $10,000, Revenuc for Extreme skateboards was $85,000. Compute Jack's accounting profit and cconomic profit. Will Jack continuc to operate his own extreme sports shop or will he quit and do something clse? Explair
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter20: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 2CQ
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