Mangerial Economics 640

640 BUS Managerial Economics 1. Title Opportunity embody When Burton e. e. cummings graduated with honors from the Canadian Trucking Academy, his father gave him a $350,000 tractor-trailer rear. Recently, Burton was boasting to some fellow truckers that his revenue enhancements were typically $25,000 per calendar month, while his run be (fuel, maintenance, and depreciation) amounted to only $18,000 per month. Tractor-trailer rigs identical to Burtons rig rent for $15,000 per month. If Burton was drive trucks for one of the competing trucking firms, he would wee $5,000 per month. Burton is proud of the feature that he is generating a net exchange flow of $7,000 ($25,000 $18,000) per month, since he would be earning only $5,000 per month if he were working for a trucking firm. Compute both Burton cummingss limpid cost per month and his implicit be per month. Explicit cost are defined by Thomas and Maurice (2011) as the financial fortune costs of using market-supplied res ources (p 9). Burton Cummings explicit costs are $18,000. In addition, implicit costs are $7,000 (revenue operating(a) costs). Thomas and Maurice reap these costs as nonmonetary hazard costs of using owner-supplied resources (2011, p 9). Compute the opportunity cost of the resources calld by Burton Cummings each month.

Opportunity costs are set forth by Thomas and Maurice as what a firms owners give up to use resources to produce goods or services (2011, p 8). Burton Cummings opportunity costs each month are $13,000. He currently nets $7,000 (revenue expense) and he has an opportunity to net $20,000 ($5,000 salar y + $15,000 rental income + 0 expenses = $2! 0,000. What advice would you give Burton Cummings? Explain your advice in foothold of opportunity costs. I would advise Burton Cummings to remain active and pitch in a salary. This income, coupled with the rental income from renting break his tractor-trailer will bring in substantially higher(prenominal) revenue because he has zero payout for operating costs (since his...If you essential to accept a full essay, order it on our website: BestEssayCheap.com

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