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
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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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
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 (time and money) in
terms of economic profit?
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