Jessica is a young doctor who has just started her own practice. Her previous position paid her $80,000 a year. For office space, she uses a building which she owns and which she has rented in the past for

$40,000 a year. Her total revenue from her new practice is $250,000. She pays $50,000 to other firms for materials and supplies, and she pays $40,000 in wages to her office nurse. Assume that Jessicas normal profit is $20,000. She paid utilities of $8,000 and she pays 10% interest on a bank loan of $40,000. Foregone interest totaled $5,000.

a. List Jessica's explicit costs and what is the total? ___________________________________________________________________________

b. List Jessicas implicit costs and what is the total? ________________________________________________________________________

c. What is the opportunity cost of all factors of production employed by Jessica? _Show work____________________________________________________

__________

d. What is Jessica's economic profit? Show work__________________________________________________________________________

e. What is Jessicas accounting profit? _Show work__________________________________________________________________

f. By how much does Jessicas total revenues exceed total cost? Show work________________________________________

g. Suppose Jessicas revenue fell to $200,000 and costs did not change. The doctors accounting profit would equal ________________ Show work and her economic profit would equal___________________. Show work.