Scenario 13-3
Diamond is an organic brocolli farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Diamond helps people organize their houses. Due to the popularity of her home-organization services, Farmer Diamond has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Diamond charges $45 an hour for her home-organization services. One spring day, Diamond spends 8 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of brocolli.
-Refer to Scenario 13-3. Diamond's economic profit from farming equals

Question

Quizplus · Accepted Answer

Diamond's economic profit from farming is calculated by subtracting the opportunity cost of her time from her farming profit. She could have earned $45/hour for 8 hours as a consultant, totaling $360. Her farming profit is $300 (yield) - $130 (cost of seeds) = $170. Economic profit = $170 - $360 = -$190.

Scenario 13-3 Diamond Is an Organic Brocolli Farmer, but She Also Spends