1. For each of the following, give an example of what might be used to nd the opportunity
cost and explain why.
(a) Cash in the bank
(b) Your time/labor
(c) Farmland you own
(d) Buying a new truck
(e) A house you own near campus
(f) Studying on a Friday night
Why is it useful to calculate both accounting prot and economic prot?
Which of the following would be included in accounting prot and/or economic prot?
Explain why.
(a) Revenue from beef sold $150,000
(b) Revenue from almonds sold $30,000
(c) Revenue from walnuts that would have been planted if almonds had not $40,000
(d) Rent that would have been received if grazing land had been rented out $10,000
(e) Production cost of beef $20,000
(f) Production cost of almonds: $10,000
(g) Salary at the best job you could have otherwise worked: $60,000
Calculate the accounting cost and the economic cost from the previous question.
Ans
Can answer only 4 parts according to Chegg policy
1 dividend earned from investing in shares is oppurtunity since we can instead use money for that purpose
2 Amount of entertainment lost by working as labour
3 investing the money instead in stock market
4 forgoing the oppurtunity to purchase a newccar
In all these cases we loose alternatives which we could have achieved instead. This is oppurtunity cost
1. For each of the following, give an example of what might be used to nd...