opportunity costs, Managerial Economics

Assignment Help:
When Burton Cummings graduated with honors from the Canadian Trucking Academy, his father gave him a $350,000 tractor-trailer rig. Recently, Burton was boasting to some fellow truckers that his revenues were typically $25,000 per month, while his operating costs (fuel, maintenance, and depreciation) amounted to only $18,000 per month. Tractor-trailer rigs identical to Burton''s rig rent for $15,000 per month. If Burton was driving trucks for one of the competing trucking firms, he would earn $5,000 per month.
a. How much are Burton Cummings''s explicit costs per month? How much are his implicit costs per month?
b. What is the dollar amount of the opportunity cost of the resources used by Burton Cummings each month?
c. Burton is proud of the fact that he is generating a net cash flow of $7,000 (= $25,000 - $18,000) per month, since he would be earning only $5,000 per month if he were working for a trucking firm. What advice would you give Burton Cummings?

Related Discussions:- opportunity costs

Externality in economics, Explain the concept of externality in economics? ...

Explain the concept of externality in economics? Give one example of a positive and a  negative externality in Australia.

Production function with one variable input, explain production function il...

explain production function illustrate production with one variable input

What is the economic role of government, Q. What is the economic role of go...

Q. What is the economic role of government? What are the roles? Meaning: economic role is the role played by the government in uplifting the economy. The important roles: 1.

Time series, the table shows gasoline rates in US

the table shows gasoline rates in US

Keynesian and new-keynesian theories of unemployment, KEYNESIAN AND NEW-KEY...

KEYNESIAN AND NEW-KEYNESIAN THEORIES OF UNEMPLOYMENT AND THE BEHAVIOUR OF REAL WAGES    As  mentioned  above, two  phenomena  about the  labour market  need  to  be explained:

Ans, State the difficulties in the measurement of profit.

State the difficulties in the measurement of profit.

Explain the efficiency wage model, Q. Explain the Efficiency wage model? ...

Q. Explain the Efficiency wage model? Efficiency wage models such as Shapiro and Stiglitz (1984) suggest wage rents as an addition to monitoring, because this gives employees a

Importance of income elasticity, Importance of Income Elasticity If a ...

Importance of Income Elasticity If a country is experiencing economic growth, the income of the people will increase.  However, for those engaged in the production of goods wi

Infant industry argument - reason for protection, Infant Industry Argument ...

Infant Industry Argument Advocates of this maintain that if an industry is just developing, with a good chance of success once it is established and reaping economies of sale,

Explain measuring arc elasticity, The concept of point elasticity is applic...

The concept of point elasticity is applicable where change in price and the resulting change in quantity are infinite or small. Though, where change in price and consequent hunger

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd