Example 1
One year ago, Jack and Jill set up a vinegarbottling firm (called JJVB). Use the following data to calculate JJVB's opportunity cost of production during its first year of operation:
Jack and Jill put $\$ 50,000$ of their own money into the firm and bought cquipment for $\$ 30,000$
They hired one worker at $\$ 20,000$ a year.
Jack quir his old job, which paid $\$ 30,000$ a year, and worked full-time for JJVB.
: Jill kept her old job, which paid $\$ 30$ an hour, but gave up 500 hours of leisure a year to work for JJVB.
I JVB bought $\$ 10,000$ of goods and services.
The market value of the cquipment at the end of the year was $\$ 28,000$
ack and Jill have a $\$ 100,000$ home loan on which they pay interest of 6 percent a year.