Tim runs a shoe shine stand at the airport. Tim has no skills, no job experience, and no alternative job. The return to entrepreneurship in the show shine business is $10,000 a year. Tim pays the airport rent of $2,000 a year, and his total revenue from shining shoes is $15,000 a year. He spent $1,000 on a chair, polish, and brushes and paid for these items using a loan that has an interest rate of 20 percent a year. At the end of one year, Tim was offered $500 for his business and all its equipment. Calculate Tim'd annual explicit costs, implicit costs, and economic profit from his shoe shine business.a. Explicit costs.b. Implicit costs.c. Economic profit.Note:-Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote.Take care of plagiarism.Answer completely.You will get up vote for sure.

Explicit costs are defined as direct payments, or payments paid out of pocket, for things like…

Answered: Tim runs a shoe shine stand at the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Tim runs a shoe shine stand at the airport. Tim has no skills, no job experience, and no alternative job. The return to entrepreneurship in the show shine business is $10,000 a year. Tim pays the airport rent of $2,000 a year, and his total revenue from shining shoes is $15,000 a year. He spent $1,000 on a chair, polish, and brushes and paid for these items using a loan that has an interest rate of 20 percent a year. At the end of one year, Tim was offered $500 for his business and all its equipment. Calculate Tim'd annual explicit costs, implicit costs, and economic profit from his shoe shine business.

a. Explicit costs.

b. Implicit costs.

c. Economic profit.

Note:-

Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote.

Take care of plagiarism.

Answer completely.

You will get up vote for sure.

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