Question

Homework (Ch 15) Attempts: Keep the Highest: 1. Definition of economic costs Antonio lives in Denver...


Homework (Ch 15) Attempts: Keep the Highest: 1. Definition of economic costs Antonio lives in Denver and runs a business that
Homework (Ch 15) Attempts: Keep the Highest: 1. Definition of economic costs Antonio lives in Denver and runs a business that sells boats. In an average year, he receives $842,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $452,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $38,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Antonio does not operate this boat business, he can work as an accountant, receive an annual salary of $48,000 with no additional monetary costs, and rent out his showroom at the $38,000 per year rate. No other costs are incurred in running this boat business. Identify each of Antonio's costs in the following table as either an implicit cost or an explicit cost of selling boats. Implicit Cost Explicit Cost The wholesale cost for the boats that Antonio pays the manufacturer The wages and utility bills that Antonio pays The rental income Antonio could receive if he chose to rent out his showroor The salary Antonio could earn if he worked as an accountant Complete the following table by determining Antonio's accounting and economic profit of his boat business Profit (Dollars) Accounting Profit Economic Profit Grade it Now Save & Continue Continue without saving
0 1
Add a comment Improve this question
✔ Recommended Answer
Answer #1

Sign Up to Unlock the answer FREE

Already have an account? Log in

Answer:

Implicit/Explicit

The wholesale cost for the boats that Antonio pays the manufacturer

Explicit Cost

The wages and utility bills that Antonio pays

Explicit Cost

The rental income Antonio could receive if he chose to rent out his showroom

Implicit Cost

The salary Antonio could earn if he worked as an accountant

Implicit Cost

Accounting Profit = Revenue – Explicit Cost

= 842,000 – [452,000 + 301,000] = 89,000

Economic Profit = revenue – Explicit Cost – Implicit Cost

= 842,000 –[ 452,000 + 301,000] – [38,000 + 48,000]

= 3000

profit

Accounting Profit

89,000

Economic profit

3000

Add a comment
Answer #2

Sign Up to Unlock the answer FREE

Already have an account? Log in


                                                                                                            Implicit  Explicit


The salary Shen could earn if he worked as a paralegal

The rental income Shen could receive if he chose to rent out his showroom

The wages and utility bills that Shen pays

The wholesale cost for the boats that Shen pays the manufacturer


Accounting Profit

32,000

Economic Profit

9,000


answered by: Cholly Breedlove
Add a comment
Know the answer?
Add Answer to:
Homework (Ch 15) Attempts: Keep the Highest: 1. Definition of economic costs Antonio lives in Denver...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 1. Definition of economic costs Edison lives in Dallas and runs a business that sells boats. In a...

    1. Definition of economic costs Edison lives in Dallas and runs a business that sells boats. In an average year, he receives $842,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $452,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $38,000 in rent per year. Assume that the value of this showroom does not depreciate over the...

  • CENGAGE | MINDTAP omework: Production and Costs (Ch 08) ck to Assignment attempts: Keep the Highest:...

    CENGAGE | MINDTAP omework: Production and Costs (Ch 08) ck to Assignment attempts: Keep the Highest: /5 3. Definition of economic costs Raphael lives in San Francisco and runs a business that sells boats. In an average year, he receives $704,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will...

  • 1. Definition of economic costs Edison lives in New York City and runs a business that...

    1. Definition of economic costs Edison lives in New York City and runs a business that sells boats. In an average year he receives 5722.000 in revenue from selling boats of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also part wages and utility bills totaling $268.000. He owns his showroor We chooses to rent it out, he will receive $1,000 in rent per vew. Assume that the value of this showroom does not...

  • 1. Costs and profit Antonio lives in New York City and runs a business that sells...

    1. Costs and profit Antonio lives in New York City and runs a business that sells boats. In an average year, he receives $842,000 from selling boats. of thi s sales he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses to rent it out, he will receive $38,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Antonio does not operate this boat...

  • 1. Definition of economic costs Jake lives in Detroit and runs a business that sells guitars....

    1. Definition of economic costs Jake lives in Detroit and runs a business that sells guitars. In an average year, he receives $704,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the...

  • 1. Definition of economic costs Lorenzo lives in Houston and runs a business that sells pianos....

    1. Definition of economic costs Lorenzo lives in Houston and runs a business that sells pianos. In an average year, he receives $722,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. He owns his showroom; if he chooses to rent it out, he will receive $1,000 in rent per year. Assume that the value of this showroom does not depreciate over the...

  • Jake lives in Denver and runs a business that sells boats. In an average year, he...

    Jake lives in Denver and runs a business that sells boats. In an average year, he receives $711,000 from selling boats. Of this sales revenue, he mus pay the manufacturer a wholesale cost of $411,000; he also pays wages and utility bills totaling $279,000. He owns his showroom; if he chooses to rent it out, he will receive $1,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Jake does...

  • Raphael lives in San Francisco and runs a business that sells boats. In an average year, he receives $721,000 from selli...

    Raphael lives in San Francisco and runs a business that sells boats. In an average year, he receives $721,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $421,000; he also pays wages and utility bills totaling $269,000. He owns his showroom; if he chooses to rent it out, he will receive $1,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Raphael...

  • 1. Definition of economic costs Lorenzo lives in Philadelphia and runs a business that sells guitars....

    1. Definition of economic costs Lorenzo lives in Philadelphia and runs a business that sells guitars. In an average year, he receives $701,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $420,000; he also pays wages and utility bills totaling $247,000. He owns his showroom; if he chooses to rent it out, he will receive $9,000 in rent per year. Assume that the value of this showroom does not depreciate over the...

  • Homework (Ch 13) < Back to Assignment Attempts: 0.5 1 Keep the Highest: 1/2 1. Definition...

    Homework (Ch 13) < Back to Assignment Attempts: 0.5 1 Keep the Highest: 1/2 1. Definition of economic costs Bob lives in San Diego and runs a business that sells guitar, In an average year. he receives ST25000 from selling guitars of this sales reven , he must pay the manufacturer a wholesale cost of $425.000; he also pays wages and utility bills totaling $265 000. He owns his showroom if he chooses to rent it out, he will receive...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT