1.A company offers package delivery. It is considering expanding its facilities. It currently has fixed costs of $5 million per month and its variable costs are $4 per package. It charges $5 per package and has a monthly volume of 10 million packages. If it expands, its fixed costs per month will double and its variable costs per package will be half as much as before. Should the company expand?

2, Joe quits his computer programming job, where he was earning a salary of $100,000 per year, to start his own computer software business, with revenue of $150,000, in a building that he owns and was renting out for $25,000 per year. In his first year of business he had the following expenses: rent $0 and other expenses, $50.000. What are the accounting profits and the economic profits associated with Joe's computer software business?