Jessica is a young doctor who has just started her own practice.Her previous position paid her $80,000 a year.For office space,she uses a building which she owns and which she has rented in the past for $40,000 a year.Her total revenue from her new practice is $250,000.She pays $50,000 to other firms for materials and supplies,and she pays $40,000 in wages to her office nurse.Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000.
a.Which of Jessica's costs are explicit costs and what is their total?
b.Which of Jessica's costs are implicit costs and what is their total?
c.What is the opportunity cost of all factors of production employed by Jessica?
d.What is Jessica's economic profit?

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The Answer of Jessica is a young doctor who has just started her own practice.Her previous position paid her $80,000 a year.For office space,she uses a building which she owns and which she has rented in the past for $40,000 a year.Her total revenue from her new practice is $250,000.She pays $50,000 to other firms for materials and supplies,and she pays $40,000 in wages to her office nurse.Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000.
a.Which of Jessica's costs are explicit costs and what is their total?
b.Which of Jessica's costs are implicit costs and what is their total?
c.What is the opportunity cost of all factors of production employed by Jessica?
d.What is Jessica's economic profit?

Jessica Is a Young Doctor Who Has Just Started Her