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Question: Justin Brimer owns his own taxi, for which he bought a $23,000 permit to operate two years ago. Mr. Brimer earns $34,000 a year operating as an independent but has the opportunity to sell the taxi and permit for $93,000 and take a position as dispatcher for Carter Taxi Co. The dispatcher position pays $38,000 a year for a 37-hour week. Driving his own taxi, Mr. Brimer works approximately 47 hours per week. If he sells his business, he will invest the $93,000 and can earn a 15 percent return.
Required: a. Determine the opportunity cost of owning and operating the independent business.
b. Calculate the earnings of Justin Brimer operating as an independent.
b. Calculate the earnings of Justin Brimer working as a dispatcher.
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