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

Aalbania enjoy a comparative advantage, Refer to above figure. Albania refu...

Refer to above figure. Albania refused to engage in international trade for ideological reasons. To maximize its economic welfare it would choose to produce at which point in the d

Accomplish the desired outcome, Suppose that the present level of income in...

Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential

Enumerate the scope of managerial economics, Enumerate the Scope of manager...

Enumerate the Scope of managerial economics The scope of managerial economics contains following subjects:  1. The Theory of demand 2. The Theory of production 3. The

The determination of the value money, The Determination of the Value Money ...

The Determination of the Value Money   Since money is primarily a medium of exchange, the value of money means what money will buy.  If at one time a certain amount of money

Least cost factor combination, Producers Equilibrium or Optimal Combination...

Producers Equilibrium or Optimal Combination of Inputs  The analysis of production function has demonstrated that alternative combinations of factors of production that are tech

Nature and function of money, The nature and function of money The dev...

The nature and function of money The development of money was necessitated by specialization and exchange.  Money was needed to overcome the shortcomings and frustrations of t

Gdp growth, Discuss how the nation's present economic situation may affect ...

Discuss how the nation's present economic situation may affect your business in the next year (your market is the entire US economy).  Contain the following in your analysis. a)

Determine that the laws of economics still work today, (i) Do the laws of e...

(i) Do the laws of economics still work today? (use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can sh

Why do managers need to know economics?, Economics contributes a great deal...

Economics contributes a great deal with towards the performance of managerial duties and responsibilities. Just as biology donates to the medical profession and physics of engineer

Open market operations, Open Market Operations The Central Bank holds ...

Open Market Operations The Central Bank holds government securities.  It can sell some of these, or buy more, on the open market, buying or selling through a stock exchange or

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