Last year, Jarod left a job that pays $90,000 to run his own bike repair shop. Jarod's shop charges $65 for a repair, and last year the shop performed 5,000 repairs. Jarod's production costs for the year included rent, wages, and equipment. Jarod spent $65,000 on rent and $120,000 on wages for his employees. Jarod keeps whatever profit the shop earns but does not pay himself an official wage. Jarod used $20,000 of his savings to buy a machine for the business. His savings were earning an annual interest rate of 5 percent. What are Jarod's annual accounting and economic profits? O Jarod's annual accounting profit= $140,000 Jarod's annual economic profit= $49,000 O Jarod's annual accounting profit= $49,000 Jarod's annual economic profit= $140,000 O Jarod's annual accounting profit= $140,000 Jarod's annual economic profit= $139,000 O Jarod's annual accounting profit= $139,000 Jarod's annual economic profit= $30,000

Last year, Jarod left a job that pays $90,000 to run his own bike repair shop. Jarod's shop charges $65 for a repair, and last year the shop performed 5,000 repairs. Jarod's production costs for the year included rent, wages, and equipment. Jarod spent $65,000 on rent and $120,000 on wages for his employees. Jarod keeps whatever profit the shop earns but does not pay himself an official wage. Jarod used $20,000 of his savings to buy a machine for the business. His savings were earning an annual interest rate of 5 percent. What are Jarod's annual accounting and economic profits? O Jarod's annual accounting profit= $140,000 Jarod's annual economic profit= $49,000 O Jarod's annual accounting profit= $49,000 Jarod's annual economic profit= $140,000 O Jarod's annual accounting profit= $140,000 Jarod's annual economic profit= $139,000 O Jarod's annual accounting profit= $139,000 Jarod's annual economic profit= $30,000

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 20.5IP

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