EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 14, Problem 2IAPA
To determine
Sonya's previous income = $25,000 a year
Return of other entrepreneurs in greeting card industry = $14,000 a year
Sonya's cost of cards = $10,000 from manufacturers
Sonya's revenue = $58,000
Rental cost = $5,000
Cost of utilities = $1,000
Cost of cash register purchased from savings account = $2000
Savings account interest rate = 3%
Sonya was offered $1,600 for her cash register at the end of the year.
Determine explicit costs, implicit costs and economic profit for the year.
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Barney decides to quit his job as a corporate accountant, which pays $12,000 a month, and goes into business for himself as a certified public accountant.
He runs his business from his converted garage apartment, which he could rent out for $315 a month if he wasn’t using it as a home office. He must purchase office supplies worth $85 a month, and his monthly electricity bill has increased by $40 now that he is working out of his home office.
After six months of working from home, Barney has earned an average of $17,000 per month.
Instructions: Enter your answers as a whole number.
a. What are Barney’s monthly explicit costs?
$
b. What are Barney’s monthly implicit costs?
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c. What are Barney’s monthly economic costs?
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Barney decides to quit his job as a corporate accountant, which pays $14,000 a month, and goes into business for himself as a certified public accountant.
He runs his business from his converted garage apartment, which he could rent out for $320 a month if he wasn’t using it as a home office. He must purchase office supplies worth $70 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office.
After six months of working from home, Barney has earned an average of $16,000 per month.
Instructions: Enter your answers as a whole number.
a. What are Barney’s monthly explicit costs?
$
b. What are Barney’s monthly implicit costs?
$
c. What are Barney’s monthly economic costs?
[i need a,b,c answer i will 5 upvotes]
Barney decides to quit his job as a corporate accountant, which pays $12,000 a month, and goes into business for himself as a
certified public accountant.
He runs his business from his converted garage apartment, which he could rent out for $315 a month if he wasn't using it as a
home office. He must purchase office supplies worth $85 a month, and his monthly electricity bill has increased by $40 now that he is
working out of his home office.
After six months of working from home, Barney has earned an average of $14,000 per month.
Instructions: Enter your answers as a whole number.
a. What are Barney's average monthly accounting profits?
2$
b. What are Barney's average monthly economic profits?
%24
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