Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $60,000 a year, and he pays workers $110,000 in wages. In return, he produces 50,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $☐ (Enter your response as an integer.) What is the farmer's accounting profit? The peach farmer earns accounting profit of $ (Enter your response as an integer.)

Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $60,000 a year, and he pays workers $110,000 in wages. In return, he produces 50,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 5 percent and that the farmer could otherwise have earned $30,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $☐ (Enter your response as an integer.) What is the farmer's accounting profit? The peach farmer earns accounting profit of $ (Enter your response as an integer.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $50,000 a year, and he pays workers $130,000 in wages. In return, he produces 250,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 4 percent and that the farmer could otherwise have earned $40,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $. (Enter your response as an integer.)
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