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Karen is offered a job with a salary of $70,000, which she turns down to start...

Karen is offered a job with a salary of $70,000, which she turns down to start her own business. She uses $20,000 of her own savings to help start the business, savings that had been providing her a return of $1,000 per year. Over her first year in business, Karen collects total revenue of $180,000 and must cover explicit costs of $105,000. During her first year in business, Karen's accounting profit is _____, and her economic profit is _____.

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Answer #1

Total Revenue - 180.000 Explicit. Costs : 105,000 Implicit costs are Salary offered - 70000 Return on savings = 1,000 Total b

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