Gilberto lives in Miami and runs a business that sells boats. In an average year, he receives $723,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $423,000; he also pays vages and utility bills totaling $267,000. He owns his showroom; if he chooses to rent it out, he will receive $2.000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Gilberto does not operate this boat business, he can work as a financial advisor, receive an annual salary of $20,000 vith no additional monetary costs, and rent out his showroom at the $2.000 per year rate. No other costs are incurred in running this boat business. Identify each of Gilberto's costs in the following table as either an implicit cost or an explicit cost of selling boats.

Gilberto lives in Miami and runs a business that sells boats. In an average year, he receives $723,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $423,000; he also pays vages and utility bills totaling $267,000. He owns his showroom; if he chooses to rent it out, he will receive $2.000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Gilberto does not operate this boat business, he can work as a financial advisor, receive an annual salary of $20,000 vith no additional monetary costs, and rent out his showroom at the $2.000 per year rate. No other costs are incurred in running this boat business. Identify each of Gilberto's costs in the following table as either an implicit cost or an explicit cost of selling boats.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 42P: A small company that shovels sidewalks and driveways has 100 homes signed up for its services this...

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