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Economic Assignment
John works 40 hours a week managing his own business, without drawing a salary. He could be earning $600 a week doing the same job for his former employer. He has invested $100,000 of his own money in his business and owes the bank $100,000. The interest on his bank debt is $200 a week. If John's accounting profit is $1,000 per week, what is his economic profit?
• Consider the production schedule below. Where is the average product of labor maximized and at what point does diminishing marginal product of labor set in?
• Using regression analysis, where labor is the "X" variable, find the best production equation to estimate total output.
output
labor
0
6
1
16
2
29
3
44
4
55
5
60
62
7
8
61
9
59
10
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