Illustrate what is the total opportunity cost of the day

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Reference no: EM1360488

Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges $25 an hour for his guitar lessons. One spring day, he spends 10 hours in his fields planting $130 worth of seeds on his farm. He expects that the seeds he planted will yield $300 worth of wheat.

1. What is the total opportunity cost of the day that Farmer Tony incurred for his spring day in the field planting wheat?

2. Tony's accountant would most likely figure the total cost of his wheat planting to equal

a. $25.
b. $130.
c. $300.
d. $380.

3. What is Tony's accounting profit?
4. What is his economic profit?

Reference no: EM1360488

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