Fay runs a hot dog cart at the sports stadium. Fay has no skills, no job experience, and no alternative employment. Entrepreneurs in the hot dog cart business earn $12,000 a year. Fay pays the rent of $2,000 a year, and her total revenue is $15,000 a year. She borrowed $1,000 at 10 percent a year to buy equipment. At the end of one year, Fay was offered $600 for her business and all its equipment. Fay's explicit costs are $2,100. Fay's implicit costs are $ 12,400. Fay's economic profit in the first year is 500 dollars.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Fay runs a hot dog cart at the sports stadium. Fay has no skills, no job experience, and no alternative employment.
Entrepreneurs in the hot dog cart business earn $12,000 a year.
Fay pays the rent of $2,000 a year, and her total revenue is $15,000 a year.
She borrowed $1,000 at 10 percent a year to buy equipment.
At the end of one year, Fay was offered $600 for her business and all its equipment.
Fay's explicit costs are $2,100.
Fay's implicit costs are $ 12,400.
Fay's economic profit in the first year is 500 dollars.
Transcribed Image Text:Fay runs a hot dog cart at the sports stadium. Fay has no skills, no job experience, and no alternative employment. Entrepreneurs in the hot dog cart business earn $12,000 a year. Fay pays the rent of $2,000 a year, and her total revenue is $15,000 a year. She borrowed $1,000 at 10 percent a year to buy equipment. At the end of one year, Fay was offered $600 for her business and all its equipment. Fay's explicit costs are $2,100. Fay's implicit costs are $ 12,400. Fay's economic profit in the first year is 500 dollars.
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