Eh Home Insert Draw Design Layout References Mailings Review View 9 Tell me reshare Geomments AaBchDdEe AaBchDdEe AaBchDc AaBchDdEt AaBb( > Q Q; - Nurmal N0 Spacing Headin91 Heading 2 Title Styles Dictate Sensmvuy Editor Pane 9 v C .3] D i236921 Assignment 2_FA22_ Q $0 TimesNew... v 11 v AA AV Aav 1% Paste $6 BIQvabxzx' Avvav 1 1) Suppose you are considering whether to purchase a house off of Lake Erie for $300,000. You expect the total costs of maintaining the property (utilities, repairs, etc.) to equal $15,000/year, and that you would be able to generate $25,000/year in revenue if you were to put the house on the shorLtenn rental market. a. (3) Suppose you are deciding between purchasing the home or whether to invest $300,000 in an interest-bearing account. If your objective is to maximize your own net income, what would the interest rate have to equal for you to invest in the interest-bearing account? b. (4) Suppose you decide to buy the house, in part because you have two kids who really want to be able to stay in their own house near Lake Erie. Now you have to decide whether/when to list the house on Airbnb or stay in the house yourself. Briey explain what this decision would depend on. What are the implicit (opportunity) costs associated with renting the house to 5 Paste 1e else on a given day? What are the implicit costs associated with the staying in the house yourself? 0. (4) Suppose the house would cost $400,000 instead of $300,000, but everything else (revenue/maintenance costs) are the same. What is the new answer for question a.? Would this higher price change your answers for question b.? If so, how? 4. (12) Suppose you own a sandwich shop, appropriately named \"MBA Sandwiches\" (MBA = 'My Big Amazing') with xed costs of $1,000/month and marginal costs of $2.50/sandwich. If the price is $6/sandwich, 500 sandwiches would be sold. If the price is $5/sandwich, 760 sandwiches would be sold. a.) (3) Use these gures to calculate the price elasticity of demand for sandwiches. b.) (5) Calculate the monthly prots and prot margins (prot/revenue) associated with the price of $6/sandwich and $5/sandwich. c.) (3) Given these calculations, what price should you charge for sandwiches? Explain. Page 1 of 2 817 words {I} English (United States) Accessibility: Good to go I 1 Focus 1 l ; Isa + 141%