E202ProblemSet6.2

E202ProblemSet6.2 - a. How much will Jacobs earn? What...

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e. If John can earn $1,000 a month elsewhere in a job he likes just as well as running the café, how much additional revenue would the café have to collect each month to earn a normal profit? 4. The city of New Orleans has 200 advertising companies, 199 of which employ designers of normal ability at a salary of $100,000 a year. Paying this salary, each of the 1999 firms makes a normal profit on $500,000 in revenue. However, the 200 company employs Janus Jacobs, an th unusually talented designer. This company collects $1,000,000 in revenues due to Jacob’s talent.
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Unformatted text preview: a. How much will Jacobs earn? What proportion of his annual salary will be economic rent? b. Why wont the advertising company for which Jacobs works be able to earn an economic profit? 5. Explain carefully why, in the absence of patent, a technological innovation invented and pioneered in one tofu factory will cause the supply curve for the entire tofu industry to shift to the right. What will finally halt the rightward shift?...
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This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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