Economic rent of a movie star who earns millions of dollar.

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Chapter 32, Problem 4E

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Economic rent of a movie star who earns millions of dollar.

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QUESTION 1: 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 some follows truckers that his revenues were typically $35,000 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 for one of the competing trucking firms, he would earn $5,000 per month. All underlying work must be shown. A) How much is Burton's accounting cost? a) $18,000 b) $35,000 c) $33,000 d) $20,000 B) How much is Burton's economic cost? a) $18,000 b) $38,000 c) $20,000 d) $55,000 C) How much is Burton's economic profit? a) $17,000 b) $20,000 c) -$3,000 d) $15,000 D) What should Burton do? Should he stay in his trucking business or rent the rig and start working for the competing trucking company? Briefly explain. E) What is the minimum Burton should earn…