lee, a programmer, earned $350,000 in 2010, but im 2011, he began to manufacture computer monitors. after one year, he submitted the following data to his accounthe stopped renting out his cottage for $35,000 a year and use it as his factory.the market value of cottage increased from $700,000 to $710,000he spent $50,000 on materials, phone, etc.he paid $150,000 in wageshe used $100,000 from his saving account, which pays five 5% interest a yearhe borrowed $400,000 at 10% a year from the bankhe sold $1,600,000 worth of monitorsnormal profit is $250,000 a year compute for the following:lee's explicit cost lee's implicit costlee's economic profit

Implicit cost is the imputed cost of factors of production owned by the producer himself and are not…

Answered: lee, a programmer, earned $350,000 in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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lee, a programmer, earned $350,000 in 2010, but im 2011, he began to manufacture computer monitors. after one year, he submitted the following data to his account

he stopped renting out his cottage for $35,000 a year and use it as his factory.
the market value of cottage increased from $700,000 to $710,000
he spent $50,000 on materials, phone, etc.
he paid $150,000 in wages
he used $100,000 from his saving account, which pays five 5% interest a year
he borrowed $400,000 at 10% a year from the bank
he sold $1,600,000 worth of monitors
normal profit is $250,000 a year

compute for the following:

lee's explicit cost
lee's implicit cost
lee's economic profit

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