1. Last year, John quit his job as an airline pilot and opened his own pilot training school. He was earning $50,000 as a pilot. He withdrew $10,000 from his savings where he was earning 3 percent interest and used the money in his new business. He used a building he owns as a hangar that he could have rented out for $20,000 per year. He borrowed $20,000 from his bank for which he pays 2% interest a year. He bought a computer for $1,000, bought office supplies for $500, rented an airplane for $10,000, paid $1,000 for fuel and maintenance, and hired one worker for $40,000. His total revenue from pilot training classes last year equaled $100,000. Calculate John's Accounting profit and Implicit cost last year. [4 points) 2. Suppose a competitive market has a market demand given as QD = 80 - P and market supply given as QS = 4P - 10. Each identical firm has MC = 29, ATC = 1.59 and AVC = 9. Calculate each firm's short-run profit? Use a graph to show the profit. What would the profit be in the long run (Explain)? [6 points)