Suppose that your neighbor has just closed her books from her first year in the retail flower business and is ecstatic with the profit her accountant says she has earned. The store grossed $250,000 in sales over the year, and its explicit costs for rent, plants and flowers, electricity, and the like were $175,000. Her husband is not quite as elated but can’t figure out exactly why. In discussing the situation with you, he offers the following information. The two of them invested $200,000 of their savings, which was earning an 8 percent return, to go into this business. She gave up her job, which was paying her $64,000 a year, at a local corporation. He worked every evening and most weekends at the store—giving up the opportunity to take on additional clients or work overtime. In addition to being tired, he figures that he lost $25,000 in additional income. What was their economic cost of production? How much normal profit should they have expected to receive? Have they made any economic profit? What kind of advice would you give them?