Ch11_12_part2_Practice_Problems

C 25 and her economic profits are 100 d 75 and her

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Unformatted text preview: ly d. (i), (ii), (iii), and (iv) 6. Katherine gives piano lessons for $15 per hour. She also grows flowers, which she arranges and sells at the local farmer’s market. One day she spends 5 hours planting $50 worth of seeds in her garden. Once the seeds have grown into flowers, she can sell them for $150 at the farmer’s market. Katherine’s accounting profits are a. $100, and her economic profits are $25. b. $100, and her economic profits are $75. c. $25, and her economic profits are $100. d. $75, and her economic profits are $125. Scenario 1: Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000. She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%. 7....
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