Shen lives in San Diego and operates a small coff revenue from sales, he must pay the manufacturer a wholesale cost of $427,000. He also pays several utility companies, wages totaling $254,000. He owns the building that houses his storefront; if he choose to rent it out, he would receive a yearly amount of $31,000 in rent. Assume there is no depreciation in the value of his property over the year. Further, if Shen does not operate the drone business, he can work as a blogger and earn a yearly salary of $26,000 with no additional monetary costs, and rent out his storefront at the $31,000 per year rate. There are no other costs faced by Shen in running this drone company. Identify each of Shen's costs in the following table as either an implicit cost or an explicit cost of selling drones. Explicit Cost Implicit Cost O O The wholesale cost for the drones that Shen pays the manufacturer The rental income Shen could receive if he chose to rent out his showroom The salary Shen could earn if he worked as a blogger The wages that Shen pays O O ο οο ο

Shen lives in San Diego and operates a small coff revenue from sales, he must pay the manufacturer a wholesale cost of $427,000. He also pays several utility companies, wages totaling $254,000. He owns the building that houses his storefront; if he choose to rent it out, he would receive a yearly amount of $31,000 in rent. Assume there is no depreciation in the value of his property over the year. Further, if Shen does not operate the drone business, he can work as a blogger and earn a yearly salary of $26,000 with no additional monetary costs, and rent out his storefront at the $31,000 per year rate. There are no other costs faced by Shen in running this drone company. Identify each of Shen's costs in the following table as either an implicit cost or an explicit cost of selling drones. Explicit Cost Implicit Cost O O The wholesale cost for the drones that Shen pays the manufacturer The rental income Shen could receive if he chose to rent out his showroom The salary Shen could earn if he worked as a blogger The wages that Shen pays O O ο οο ο

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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