Hubert lives in Calgary and runs a business that sells guitars. In an average year, he receives $784,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $434,000; he also pays wages and utility bills totalling $256,000. He owns his showroom; if he chooses to rent it out, he will receive $11,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Hubert does not operate this guitar business, he can work as a nancial advisor and receive an annual salary of $24,000 with no additional monetary costs. No other costs are incurred in running this guitar business. Identify each of Hubert's costs in the following table as either an implicit cost or an explicit cost of selling guitars. Implicit Cost Explicit Cost The salary Hubert could earn if he worked as a nancial advisor Q The wages and utility bills that Hubert pays 0 O The rental income Hubert could receive it he chose to rent out his showroom O O The wholesale cost for the guitars that Hubert pays the manufacturer Q Q Complete the foilom'ng table by detennining Hubert's accounting and economic prot of his guitar business. Prot (Dollars) Accounting Prot E Economic Prot E True or False: Hubert is earning a normal profit. 0 Tme O False 4. Total and marginal product Underground Sandwiches, a sandwich shop, has the following marginal product curve (labelled MP) for its hourly production. 20 O 18 O 16 14 O 12 10 MARGINAL PRODUCT (Sandwiches per worker) Co MP O 5 0 2 3 LABOUR (Workers)When labour increases from three to four workers, total product changes by per hour. Use the orange points (square symbol) to plot the production function on the following graph. Assume that if there are no workers, Underground Sandwiches does not have any output. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 80 -O 72 Production Function 64 56 48 40 TOTAL OUTPUT (Sandwiches) 32 24 16 8 0 2 3 QUANTITY OF LABOUR (Workers)