View the step-by-step solution to:

A grage run by its owner mechanic has a gross income of Rs. 20000, annual expenses amount to Rs 17000 this leaves an annual profit of Rs 3000. the...

A grage run by its owner mechanic has a gross income of Rs. 20000, annual expenses amount to Rs 17000 this leaves an annual profit of Rs 3000. the fixed investment (i.e., the investment in building and machine)is say, Rs.8000. the prevailing rate of interest is 5%: This means that the fixed investment by our gagage owner would have earned Rs. 400 a zear, had the business not been carried on, might amount to anouther Rs. 200 a Year; While the owner mitht have earned Rs. 1800 a year from his managerial and engineering skills by working for some concern. The sum of these opportunity costs is Rs. 2400. If we consider these imputed costs as well, we find that our garage owner is making a profit of Rs 3000 is the accounting profit per year. In economics profit, we have to take care of opportunity costs as well.

Required, calculate the economist profit vs accountants profit?

This question was asked on May 02, 2010.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • -

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards