Calculate lees opportunity cost of production


Problem

Lee is a computer programmer who earned $35,000 in 2011. But on January 1, 2012, Lee opened a body board manufacturing business. At the end of the first year of operation, he submitted the following information to his accountant:

- He stopped renting out his cottage for $3,500 a year and used it as his factory. The market value of the cottage increased from $70,000 to $71,000.

- He spent $50,000 on materials, phone, etc.

- He leased machines for $10,000 a year.

- He paid $15,000 in wages.

- He used $10,000 from his savings account, which earns 5 percent a year interest.

- He borrowed $40,000 at 10 percent a year.

- He sold $160,000 worth of body boards.

- Normal profit is $25,000 a year.

Calculate Lee's opportunity cost of production and his economic profit.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Calculate lees opportunity cost of production
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