Assume you are a budding chef, and you want to change careers to run a gourmet food truck, the job of your dreams. Decide whether to quit your current job. Assume that your current job pays $16,000 per year.

a. What types of items would make up your fixed costs? Assume that these total $6,000 per year.

b. What types of items would make up your variable costs? Assume that these total $8,000 per year.

c. What is your opportunity cost?

d. Assume a total sales revenue of $24,000. What is your accounting profit? What is your economic profit?

e. Is it economically wise for you to quit your job to start running the food truck? Explain.

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1 Fixed costs involved in running a gourmet food truck are Vehicle rent unless ... View the full answer