Economic

Refer to Prof. TOMMY

1.Answer all of the following questions in Microsoft Word file with complete questions and answers and attach it.

1.Determine whether each of the following is an explicit cost or an implicit cost:  

a. The wages that owners could earn if they did not work for themselves 

b. Rent paid for the use of a warehouse not owned by the firm 

c. A firm’s use of a warehouse that it owns and could rent to another firm 

d. Payments for labor purchased in the labor market

2. Calculate the accounting profit or loss as well as the economic profit or loss in each of the following situations: 

           a.    A firm with total revenues of $100 million, explicit cost of $90 million, and implicit costs of $40 million 

           b.    A firm with total revenues of $100 million, explicit cost of $100 million, and implicit costs of $30 million 

           c.     A firm with total revenues of $100 million, explicit cost of $115 million, and implicit costs of $25 million 

           d.    A firm with total revenues of $250,000, explicit cost of $275,000, and implicit costs of $50,000