Jessica has been working for a law firm and earning an annual salary of $90,000. She decides to open her own practice. Her annual expenses were $15,000 for office rent, $1,700 for supplies, $800 for utilities, and a $30,000 salary for a secretary/bookkeeper. Jessica covered her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. (The $20,000 was spent on furniture and at the end of the year the furniture is still in the office, assuming there is no depreciation, so the $20,000 from the certificate of deposit is not a cost). Her practice generated $150,000 revenue in the first year. Please show calculations thank you! Calculate Jessica's Implicit & explicit costs. Calculate Jessica's Economic costs and economics profit. Calculate Jessica's Accounting profits.
Jessica has been working for a law firm and earning an annual salary of $90,000. She decides to open her own practice. Her annual expenses were $15,000 for office rent, $1,700 for supplies, $800 for utilities, and a $30,000 salary for a secretary/bookkeeper. Jessica covered her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. (The $20,000 was spent on furniture and at the end of the year the furniture is still in the office, assuming there is no depreciation, so the $20,000 from the certificate of deposit is not a cost). Her practice generated $150,000 revenue in the first year. Please show calculations thank you! Calculate Jessica's Implicit & explicit costs. Calculate Jessica's Economic costs and economics profit. Calculate Jessica's Accounting profits.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Jessica has been working for a law firm and earning an annual salary of $90,000. She decides to open her own practice. Her annual expenses were $15,000 for office rent, $1,700 for supplies, $800 for utilities, and a $30,000 salary for a secretary/bookkeeper. Jessica covered her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. (The $20,000 was spent on furniture and at the end of the year the furniture is still in the office, assuming there is no depreciation, so the $20,000 from the certificate of deposit is not a cost).
Her practice generated $150,000 revenue in the first year.
Please show calculations thank you!
- Calculate Jessica's Implicit & explicit costs.
- Calculate Jessica's Economic costs and economics profit.
- Calculate Jessica's Accounting profits.
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