Reference no: EM13985662
Phil the Pharmacist currently is working for the Gregory Pharmacy Company earning $40,000 in salary per year. He works 6 days per week and travels one hour in each direction to and from work each day. Phil values his own time at $9.00 per hour. Phil only works 50 weeks out of the year, for he always takes his two weeks paid vacation. He receives two simultaneous offers one day. Offer number one is to take a new job at a different pharmacy for a $60,000 salary. His commute would decrease to one-half hour in each direction, but he would still be working 6 days per week. His second offer is to open/buy a pharmacy of his own. That pharmacy would generate revenue of $200,000 for the first year. If Phil decides to buy his own pharmacy, it will cost him $100,000 to purchase, and he will have to take out an $80,000 loan from the bank at a 10% interest rate. The bank, for the first year, wants one payment of interest only at the end of the year (i.e., they are charging Phil simple interest for the first year). He will also have to use $20,000 of his own savings for the remainder of the funds. Currently his savings is earning 6% interest. If he buys the pharmacy, his commute will be 1.5 hours in each direction 6 days per week, and he will have to pay rent of 7,000 per year, buy supplies costing him 42,000 per year, hire an assistant at $35,000 per year, and pay for utilities that amount to 25,000 per year. You need to give Phil some advice. You should probably also review the concepts of explicit and implicit costs, opportunity cost, and economic profit before you give him any advice.
a. If he leaves his current job and takes job offer number one, how much more economic income will Phil be earning? Explain and justify your answer in detail.
b. For the first year only, if Phil decides to open up his own pharmacy, how much economic income (or economic profit) will his pharmacy earn? What are the revenue and costs that Phil needs to consider in order to make a properly informed decision. Explain and justify your answer in detail.
c. What should Phil do? Keep his current job? Switch to the new job? Or buy and open the pharmacy?
|
When the money supply increases at the same time
: When the money supply increases at the same time that velocity is decreasing, total spending will a. always rise. b. always decline. c. fall if the decrease in velocity is relatively less than the increase in the money supply. d. fall if the decrease..
|
|
Write a program that mimics a calculator
: Write a program that mimics a calculator. You should define the following functions: showMenu: it shows a menu of options to the user. Below is an example that shows the outputs of this function on the monitor.
|
|
Profit-maximizing prices and quantities graphically
: A pharmaceutical firm faces the following monthly demands in the U.S. and Mexican markets for one of its patented drugs: QUS = 300,000 - 4,000*PUS and QX = 240,000 - 7,000*PX where quantities represent the number of prescriptions. Estimate the profit..
|
|
Health insurance tends inevitably to cause moral hazard
: Because health insurance tends inevitably to cause moral hazard, will the population necessarily be over insured (in the sense that a reduction in insurance would improve welfare)? Are there beneficial factors that balance against the costs of welfar..
|
|
How much more economic income will phil be earning
: Phil the Pharmacist currently is working for the Gregory Pharmacy Company earning $40,000 in salary per year. He works 6 days per week and travels one hour in each direction to and from work each day. Phil values his own time at $9.00 per hour. For t..
|
|
Find out in which direction the particle moves
: Find out in which direction the particle moves and its final velocity when hits one of the spheres. . Use: R = 2.0 cm, -ρ = - 1.0 μC/m3, σ- 60.0 nC/m2, Q = 8.85 μC and m = 0.3 ng.
|
|
What is his new equilibrium quantity
: Consider the following information on Alfred’s demand for visits per year to his health clinic, if his health insurance does not cover (100 percent coinsurance) clinic visits. a. Alfred has been paying $25 per visit. How many visits does he make per ..
|
|
Book review on confronting without offending
: Book Review on "Confronting Without Offending" by Deborah Smith Pegues, 2009. Abstract. Summarize what you have read, boiling the book down into 400-600 words (no more than 2 pages). Prove you comprehend the readings by writing a no-nonsense summar..
|
|
Supply and demand conditions are changing
: We are looking at the market place for good ABC. Supply and/or demand conditions are changing. Assume that after these changes occur, the equilibrium price increases while the equilibrium quantity decreases. Now, based on those possible changes suppl..
|