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Janequit her job at IBM where she earned $50,000 a year. Shecashed in $50,000 in corporate bonds that earned 10% interestannually to buy a mini-bus. Jane has decided to buy themini-bus and set up a commuter service between Lincoln andOmaha. There are 1000 people who will pay $400 a year eachfor the commuter service; $280 from each person goes for gas,maintenance, insurance, depreciation, etc.

(a) Complete thefollowing questions: (1) What are Jane's totalrevenues? (2) What are Jane's explicit costs? (3)What is her accounting profit?

(b) List twoimportant implicit costs that Jane has not included.

(c) What isJane's pure economic profit (loss)?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9823944

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