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ECS2731_2017S2_Tutorial 1_Questions Question 1 How is the popular notion of business profit different from the economic profit concept? What role does the idea of normal profits play in this difference? And which of the two concepts provides the more appropriate basis for evaluating business operations? Why? Question 2 Sibongile is a College professor who earns $40,000 a year. She decides to leave her job and open a beauty salon. She anticipates annual revenues of $150,000. Her expenses will be as follows: Employee salaries $65,000 Insurance $4,000 Utilities $3,000 Lease $6,000 Supplies $12,000 Interest payments $10,000 Calculate Sibongile's anticipated explicit costs, implicit costs, business profits, and economic profits. What is the minimum revenue that is required for Sibongile to earn a normal profit (i.e., an economic profit of zero)?
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