Ivonne quit a job paying 80000 per year to open a cupcake store. She redeemed a risk-free savings bond worth 200000 that was paying 4% interest and borrowed an additional 500000 at an interest rate of 10%. There is a 1% risk premium associated with investing in a cupcake store. During her first year of operation, Ivonne sold 800000 worth of cupcakes, paid her rent of 100000 to her landlord, spent 150000 on ingredients to make the cupcakes and claimed 20000 in depreciation. She paid herself a salary of 50000 and paid an additional 150000 in salaries to her co-workers at the store. Calculate Ivonne's Implicit Costs. 2. A price taking firm with production function q=K1/2L1/2 with K=16 units of fixed capital hires labour and capital for w=4 and r=4. For many years the firm has sold output for p=2 but next month the price of output will increase to p=8. How much output does the firm supply when p=2 ? Provide an Isoprofit Diagram to illustrate this calculation