Joan decided to start a lawn-mowing business. To purchase the mowers and the trailer to transport the mowers, Joan withdrew $1,000 from her savings account, which was earning 3% interest (or $30 this year), and borrowed an additional $2,000 from the bank at an interest rate of 7% (or $140 this year). Joan's cost of supplies, gasoline, and transportation for the summer will be $1,000, and she expects to be paid $8,000 by her clients for the lawn mowing services. What is Joan’s opportunity cost of starting and operating her lawn mowing business this year?

Answer rating: 100% (QA)

To calculate Joans opportunity costwe need to consider the forgone benefits she experiences due t... View the full answer