4. Mary just graduated from DePaul. She has two job opportunities. Option A is t

Question

4. Mary just graduated from DePaul. She has two job opportunities. Option A is to e Accountants and make $75,000 per year. Option B is to work for work for Accurat Learned Lawyers (which is right next door to Accurate $100,000 per year. She likes both jobs equally well. Accountants) and earn What is Mary's opportunity cost of working for Accurate Accountants? b. What is Mary's opportunity cost of working for Learned Lawyers? c. What is Mary's Economic Surplus of working for Accurate Accountants? d. What is Mary's Economic Surplus of working for Learned Lawyers? a.

Explanation / Answer

Answer
a)
Opportunity cost is the cost of forgone opportunity and the opportunity cost of working with Accurate is forgiving working with Learned Layers
Opportunity cost=$100000
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b)
That is the cost of not working with Accurate and that is $75000
c)
Economic profit=revenue - cost
cost is the only opportunity cost because there is no explicit cost
and revenue is salary
Economic profit=75000-100000=$25000
d)
EP=100000-75000=$25000

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