ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Fill in the blanks in the table below. The problem is a "puzzle" so the blanks are not necessarily filled in sequentially. (Hint: Determine
the total fixed cost first.)
Instructions: Enter your answers rounded to two decimal places.
Total
Average
Fixed Cost
Average
Total Cost
Marginal
Cost
Output
Variable
Total Cost
Cost
1
$5.00
$9.82
$9.82
$14.82
$19.30
$12.15
$9.48
$24.30
3
$1.67
$11.15
$33.44
4
$1.25
$37.27
$10.57
$8.83
$42.27
$1.00
$45.80
$10.16
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Transcribed Image Text:Fill in the blanks in the table below. The problem is a "puzzle" so the blanks are not necessarily filled in sequentially. (Hint: Determine the total fixed cost first.) Instructions: Enter your answers rounded to two decimal places. Total Average Fixed Cost Average Total Cost Marginal Cost Output Variable Total Cost Cost 1 $5.00 $9.82 $9.82 $14.82 $19.30 $12.15 $9.48 $24.30 3 $1.67 $11.15 $33.44 4 $1.25 $37.27 $10.57 $8.83 $42.27 $1.00 $45.80 $10.16
Gomez runs a small pottery firm. He hires one helper at $13,000 per year, pays annual rent of $5,500 for his shop, and spends
$21,500 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could
earn him $5,500 per year if alternatively invested. He has been offered $19,000 per year to work as a potter for a competitor. He
estimates his entrepreneurial talents are worth $2,500 per year. Total annual revenue from pottery sales is $75,000.
Instructions: Enter your answers as a whole number.
Calculate the accounting profit and the economic profit for Gomez's pottery firm.
Accounting profit = $
Economic profit = $
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Transcribed Image Text:Gomez runs a small pottery firm. He hires one helper at $13,000 per year, pays annual rent of $5,500 for his shop, and spends $21,500 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $5,500 per year if alternatively invested. He has been offered $19,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $2,500 per year. Total annual revenue from pottery sales is $75,000. Instructions: Enter your answers as a whole number. Calculate the accounting profit and the economic profit for Gomez's pottery firm. Accounting profit = $ Economic profit = $
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