Homework: Chapter 11, Assignment 2 Sav core: 0 of 1 pt 12 of 25 (10 complete) HW
ID: 1104999 • Letter: H
Question
Homework: Chapter 11, Assignment 2 Sav core: 0 of 1 pt 12 of 25 (10 complete) HW Score: 36%, 9 of 25 p Concept: Accounting/Econ Costs Question Help Mr. Jernigan owns a piece of land on which he grows corn. Corn production annually requires $8,000 in seed, $9,000 in ferblizer, and $6,000 in pesticides. Mr. Jernigan uses his own labor to grow the corn and therefore hires no workers. If Mr. Jernigan did not use his time to grow com, he would instead be able to sell insurance, eaming $40,000 per year Suppose another farmer has just offered to pay Mr. Jernigan rent of $25,000 per year for use of the land If Mr. Jernigan refuses to rent the land to another farmer, then what will be his accounting costs from farming corn himself on his land? What will be his economic costs? Mr. Jernigan's accounting costs will be Sper year, and his economic costs will be sper year. (Enter numeric responses using integers)Explanation / Answer
Accounting costs are those cost which are explicit in nature. All the monetary cost involved in the production process.
Economic cost incorporates both implicit and explicit costs. This includes the opportunity costs.
Accounting cost = 8000 + 9000 + 6000.
Accounting cost = $23,000.
Economic cost = 40,000 + 25,000
Economic cost = $65,000.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.