1.Mary Jones can work in a factory and earn $16,000 a year or alternatively, be a farmer. Assume that except for monetary reward, she does not care which she does. To farm, Mary must invest her saving of $20,000. The annual cost of seed, fertilizer, etc. is $5000. She would earn 10% annually on her best alternative investment.

a.What is the cost of farming (including implicit cost)?

b.What is the minimum Mary must make in farming to just make it worthwhile?

c.If her revenues are $50,000, what is her economic profit? her accounting profit?

d.Should she stay in farming?

e.What if her revenues are $20,000?