Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $7,000, buysgasoline ($1.70 in gas is required to mow each yard), and pays a helper $10.00 per yard. Prior to opening the lawncompany, Charles earned $3,000 as a lifeguard at the neighborhood swimming pool. Assume the money he used topurchase the mowing equipment could otherwise have earned 5 percent per year in the bank and that the mowingequipment depreciates at 20 percent per year. Charles plans to mow 500 yards per year.What is Charles's implicit cost of production?Charles's implicit cost of production is $per year. (Enter your response as an integer.)

Implicit cost refers to the opportunity cost of using the own resources of entrepreneurs in…

Answered: What is Charles's implicit cost of…

What is Charles's implicit cost of production? Charles's implicit cost of production is $ per year. (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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Question

Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $7,000, buys
gasoline ($1.70 in gas is required to mow each yard), and pays a helper $10.00 per yard. Prior to opening the lawn
company, Charles earned $3,000 as a lifeguard at the neighborhood swimming pool. Assume the money he used to
purchase the mowing equipment could otherwise have earned 5 percent per year in the bank and that the mowing
equipment depreciates at 20 percent per year. Charles plans to mow 500 yards per year.
What is Charles's implicit cost of production?
Charles's implicit cost of production is $
per year. (Enter your response as an integer.)

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