Question John was a cook making the average cook salary of

31 May Question John was a cook making the average cook salary of

Posted at 16:46h in Essay Writing Services by Past Papers

Question

John was a cook making the average cook salary of $60,000 per year. He also had an extra room in his house that he rented out for $10,000 per year. But John got “fed up” with his job and decided to quit and pursue his dream … making toilets. He pays a worker $40,000 per year and spends $150,000 annually on material inputs. He also kicks the tenant out of his extra room and uses it to make toilets. Every year he sells 100 toilets at $2,500 each.

a. What are John’s accounting profits as a toilet producer? (Show work)

b. What are John’s economic profits as a toilet producer? (Show work)

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