Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 7, Problem 6SQ
To determine
The explicit cost for the owner of the sushi bar.
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Francis wants to buy some paintings for their store to make it feel more classy. Francis would need to take $20,000 out of their savings account (which earns 1% interest a year) in order to finance the paintings. At the end of the year, Francis knows they could sell the paintings for $20,000 but they would choose not to. When calculating this year's economic profit, Francis would count this as a:
a.
explicit cost of $20,000 and an implicit cost of $2,000.
b.
explicit cost of $20,000 and an implicit cost of $20,000.
c.
explicit cost of $20,000.
d.
implicit cost of $2,000.
A man managing a restaurant for $20,000 per year decides to open his own diner. His revenue during the first year of operation is $110,000, and his expenses are as follows: Salaries, $55,000; Supplies $11,000; Rent, $9,000; and Utilities, $1,500. He financed the diner with a loan of $70,000 at a 5% interest rate. Calculate:
a. explicit costs
b. implicit costs
c. business profit
d. economic profit
Tammy quit her job as a math teacher making $70,000 per year to start her own online business. The first-year revenue totaled to $200,000. During the first year of online business, Tammy paid $50,000 for the office rent and $20,000 for utilities and supplies. What is the amount of accounting profit generated from Tammy’s online business?
$60,000
$200,000
$130,000
$70,000
Chapter 7 Solutions
Economics For Today
Ch. 7.5 - Prob. 1YTECh. 7 - Prob. 1SQPCh. 7 - Prob. 2SQPCh. 7 - Prob. 3SQPCh. 7 - Prob. 4SQPCh. 7 - Prob. 5SQPCh. 7 - Prob. 6SQPCh. 7 - Prob. 7SQPCh. 7 - Prob. 8SQPCh. 7 - Prob. 9SQP
Ch. 7 - Prob. 10SQPCh. 7 - Prob. 11SQPCh. 7 - Prob. 1SQCh. 7 - Prob. 2SQCh. 7 - Prob. 3SQCh. 7 - Prob. 4SQCh. 7 - Prob. 5SQCh. 7 - Prob. 6SQCh. 7 - Prob. 7SQCh. 7 - Prob. 8SQCh. 7 - Prob. 9SQCh. 7 - Prob. 10SQCh. 7 - Prob. 11SQCh. 7 - Prob. 12SQCh. 7 - Prob. 13SQCh. 7 - Prob. 14SQCh. 7 - Prob. 15SQCh. 7 - Prob. 16SQCh. 7 - Prob. 17SQCh. 7 - Prob. 18SQCh. 7 - Prob. 19SQCh. 7 - Prob. 20SQCh. 7 - Prob. 21SQCh. 7 - Prob. 22SQCh. 7 - Prob. 23SQCh. 7 - Prob. 24SQCh. 7 - Prob. 25SQ
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