Podcast Beta
Questions and Answers
What were the total revenues Milo earned from selling the cookies?
What was the total cost incurred by Milo for selling the cookies, including both explicit and implicit costs?
What is the implicit cost of baking the cookies for Milo?
What is the accounting profit calculated after considering explicit costs only?
Signup and view all the answers
Considering both explicit and implicit costs, how much profit or loss did Milo experience?
Signup and view all the answers
What was the total revenue generated from selling the 100 boxes of cookies?
Signup and view all the answers
What is the implicit cost of Milo taking time off from their job?
Signup and view all the answers
What is Milo's total explicit cost for baking the cookies?
Signup and view all the answers
If Milo had sold each box for $15 instead of $10, what would the new total revenue be?
Signup and view all the answers
What is the total cost incurred by Milo when considering both explicit and implicit costs?
Signup and view all the answers
Study Notes
Revenue
- Milo sold 100 boxes of cookies at $10 per box
- Total revenue: 100 x 10=10 = 10=1000
Explicit Costs
- Explicit costs are the direct costs of production, such as ingredients, packaging and labels.
- Explicit costs: $700
Implicit Costs
- Implicit costs are opportunity costs. These are the costs of the resources the entrepreneur uses but doesn't pay for directly.
- Milo's implicit cost includes lost wages while baking the cookies.
- Implicit costs: 20 hours x 20perhour=20 per hour = 20perhour=400
Accounting Profit
- Accounting profit is calculated as total revenue minus explicit costs.
- Accounting profit: 1000−1000 - 1000−700 = $300
Economic Profit
- Economic profit is calculated as total revenue minus both explicit and implicit costs.
- Economic profit: 1000−1000 - 1000−700 - 400=−400 = -400=−100
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz covers fundamental concepts in economics related to profit calculations, including revenue, explicit and implicit costs, accounting profit, and economic profit. It's an essential resource for students looking to understand how different types of costs impact a business's profitability.
