Caroline opens a lemonade stand for two hours. She spends $15 for ingredients and sells $50 worth of lemonade. In the same two hours, she could have mowed the neighbor's yard and earned $10.a. What are Caroline’s explicit and implicit costs? b. What is Caroline’s accounting profit? What is her economic profit? Show how you calculated each profit. The government imposes a $1,000 one-time license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?a. Average total cost.b. Marginal Cost.c. Average Variable Cost.

(Solving the first question). Answer 1: a. Explicit costs are those costs which are required to…

Answered: a. What are Caroline’s explicit and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Caroline opens a lemonade stand for two hours. She spends $15 for ingredients and sells $50 worth of lemonade. In the same two hours, she could have mowed the neighbor's yard and earned $10.

a. What are Caroline’s explicit and implicit costs?

b. What is Caroline’s accounting profit? What is her economic profit? Show how you calculated each profit.
The government imposes a $1,000 one-time license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?
a. Average total cost.
b. Marginal Cost.
c. Average Variable Cost.

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