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Jack quit his job at Canadian Tire where he earned $28000 a year He cashed in $30000 of corporate bonds that were paying him

Jack quit his job at Canadian Tire where he earned $28,000 a year. He cashed in $30,000 of corporate bonds that were paying him 10% annual interest. He used the proceeds to buy a mini-bus. Jack decided to buy the mini-bus in order to set up a commuter service between Delta and Vancouver. There are 200 people who will pay $800 a year for this commuter service. Out of the $800, $650 from each person goes to cover expenses such as: gas, maintenance, insurance and depreciation. A. What are Jack’s total revenues? B. What are Jack’s explicit costs? C. What is Jack’s accounting profit? D. List two important implicit costs that Jack has not included. E. What is Jack’s pure economic profit (loss)? What actions should Jack take based on his pure economic profit (loss)? F. What self-owned economic resource is not included in this question?

Apr 21 2020 View more View Less

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