Homework (Ch 13) O X 1. Definition of economic costs Alex lives in Dallas and runs a business that sells boats. In an average year, he receives $733,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $433,000; he also pays wages and utility bills totaling $257,000. He owns his showroom; if he chooses to A-Z rent it out, he will receive $13,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Alex does not operate this boat business, he can work as a paralegal, receive an annual salary of $23,000 with no additional monetary costs, and rent out his showroom at the $13,000 per year rate. No other costs are incurred in running this boat business. Identify each of Alex's costs in the following table as either an implicit cost or an explicit cost of selling boats. Implicit Cost Explicit Cost The salary Alex could earn if he worked as a paralegal O O The wages and utility bills that Alex pays O O The rental income Alex could receive if he chose to rent out his showroom O O bongo The wholesale cost for the boats that Alex pays the manufacturer O O Complete the following table by determining Alex's accounting and economic profit of his boat business. A+ Profit (Dollars) Accounting Profit Economic Profit