Sita is an auto mechanic and runs a smal repair shop. She Per year, pays a monthly rent of $5,000 towards the lease of the premises where her repair shop is located, and spends $20,000 per year on materials needed for repairing cars and trucks. She has invested $40,000 of her own savings in heavy equipment (air and strut compressors, brake lathes, heavy-duty lifts etc.) that could earn her $4,000 per year if invested elsewhere. She has been offered $40,000 per year by a competitor to work as a mechanic for them and she estimates the value of income she could earn in her spare time to be $5,000. The repair shop's total annual revenue is $250,000. What is Gita's yearly fixed cost in dollars? what is Gita's yearly variable cost in dollars? what is Gita's yearly explicit cost? what is Gita's yearly implicit cost? what is Gita's accounting profit? and what is Gita's yearly economic profit? and finally is Gita making the best use of her resources
Sita is an auto mechanic and runs a smal repair shop. She Per year, pays a monthly rent of $5,000 towards the lease of the premises where her repair shop is located, and spends $20,000 per year on materials needed for repairing cars and trucks. She has invested $40,000 of her own savings in heavy equipment (air and strut compressors, brake lathes, heavy-duty lifts etc.) that could earn her $4,000 per year if invested elsewhere. She has been offered $40,000 per year by a competitor to work as a mechanic for them and she estimates the value of income she could earn in her spare time to be $5,000. The repair shop's total annual revenue is $250,000. What is Gita's yearly fixed cost in dollars? what is Gita's yearly variable cost in dollars? what is Gita's yearly explicit cost? what is Gita's yearly implicit cost? what is Gita's accounting profit? and what is Gita's yearly economic profit? and finally is Gita making the best use of her resources
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![Gita is an auto mechanic and runs a small repair shop. She hires one mechanic at $20,000
Per year, pays a monthly rent of $5,000 towards the lease of the premises where her repair
shop is located, and spends $20,000 per year on materials needed for repairing cars and
trucks. She has invested $40,000 of her own savings in heavy equipment (air and strut
if
compressors, brake lathes, heavy-duty lifts etc.) that could earn her $4,000 per year
invested elsewhere. She has been offered $40,000 per year by a competitor to work as a
mechanic for them and she estimates the value of income she could earn in her spare time
to be $5,000. The repair shop's total annual revenue is $250,000. What is Gita's yearly
fixed cost in dollars? what is Gita's yearly variable cost in dollars? what is Gita's yearly
explicit cost? what is Gita's yearly implicit cost? what is Gita's accounting profit? and what
is Gita's yearly economic profit? and finally is Gita making the best use of her resources
(time and money) in terms of economic profit?
ringr
pronomics](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7d62bc50-3fe0-43af-b986-0753c7e015c3%2F4ac5a27d-a5a6-4215-98d3-28f7d02372a1%2F3ojwi3_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Gita is an auto mechanic and runs a small repair shop. She hires one mechanic at $20,000
Per year, pays a monthly rent of $5,000 towards the lease of the premises where her repair
shop is located, and spends $20,000 per year on materials needed for repairing cars and
trucks. She has invested $40,000 of her own savings in heavy equipment (air and strut
if
compressors, brake lathes, heavy-duty lifts etc.) that could earn her $4,000 per year
invested elsewhere. She has been offered $40,000 per year by a competitor to work as a
mechanic for them and she estimates the value of income she could earn in her spare time
to be $5,000. The repair shop's total annual revenue is $250,000. What is Gita's yearly
fixed cost in dollars? what is Gita's yearly variable cost in dollars? what is Gita's yearly
explicit cost? what is Gita's yearly implicit cost? what is Gita's accounting profit? and what
is Gita's yearly economic profit? and finally is Gita making the best use of her resources
(time and money) in terms of economic profit?
ringr
pronomics
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