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estion) Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that the total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risk is 10 percent annually, and that there is no depreciation. a. Calculate Explicit costs (list the items). b. Calculate Implicit costs (list the items). " с. Calculate Accounting profit. d. Calculate Economic profit. OCT 19

estion) Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that the total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risk is 10 percent annually, and that there is no depreciation. a. Calculate Explicit costs (list the items). b. Calculate Implicit costs (list the items). " с. Calculate Accounting profit. d. Calculate Economic profit. OCT 19

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Would the explicit cost just be 45,000? 2. How would I calculate implicit cost with only the numbers given? And 3. Would total revenue be 50,000?
Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that the total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risk is 10 percent annually, and that there is no depreciation. a. Calculate Explicit costs (list the items). b. Calculate Implicit costs (list the items). c. Calculate Accounting profit. d. Calculate Economic profit.
Transcribed Image Text:Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that the total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risk is 10 percent annually, and that there is no depreciation. a. Calculate Explicit costs (list the items). b. Calculate Implicit costs (list the items). c. Calculate Accounting profit. d. Calculate Economic profit.
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