Economics Assignment Help Makes your Numerical Portions Easier in Economics!

Jack is going to chop 900 lawns and get $30,000 in revenue. He can give his capital on lease equipment for $3200. Assume that fuel and other expenses including marketing, billing, bookkeeping etc, come to $1800. This means he has cash income of $25,000. Is this his profit?

Assume that Jack puts 9 hours a day for the business and for a total of 900 hours for the season. In that case, on an average, Jack is getting just under $30 an hour. He should not consider all this as a profit.

Let as assume that Jack could earn $32 an hour by working in an office. Now if we include the value of his time, ($32)(900) = $28,800, then the lawn chopping business loses $1800. In other words, he should better be working in an office rather than starting his lawn-chopping business.

On the other side, let us assume that Jack’s best option is to make $15 an hour. Then the lawn chopping business is a better option. But to compute his real profit he should less $15 an hour from his proceeds. Multiplying $15 an hour by 900 hours provides $14500 in salary. Now subtracting this from $25,000 gives $10500 of economic profit.

So if Jack does not go for the $10500 salary, then economists would call this as his opportunity cost. Opportunity cost is defined as what a person needs to give up in order getting something.

Now I think opportunity cost becomes very easy to understand with the help of a practical example. Students generally leave these topics as they find numerical complex and tough. So, Expertsmind makes these topics simpler for you. You can easily get your assignments assistance from online economics assignment help which provides you with the understanding of subject along with their basic concepts.

https://blog.expertsmind.com/

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