1.8 The data in the table represents annual costs and revenue for Anna’s Bakery, a bakery specializing in wedding cakes. Anna works 60 hours a week at the store. She also owns the building that houses her business, and if she closed the store, she could rent out the building for

$65,000 per year and go to work for her cross-town rival, Ella’s Sweet Secrets and earn a salary of $22,000 per year. Calculate the economic profit and economic cost for Anna’s Bakery. Are these figures the same as the accounting cost and accounting profit? Explain.

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Wages Paid Interest Paid on Loans Other Expenditures for Factors of Production Total Revenue $ 36,000 5,000 16,000 124,000