Part A

When maximizing their utility, economists A and B make different choices based on their preferences. The utility theory suggests that people choose things that increase their enjoyment or satisfaction.

Economist A chooses a more expensive fine dining establishment because she values quality and enjoys the fine dining experience. She is willing to pay extra for what she believes to be a superior dining experience, even if it means spending more money. This is consistent with declining marginal utility, which suggests that as consumption increases, the additional pleasure provided by each other unit decreases.

In contrast, Economist B chooses an all-you-can-eat buffet because it allows him to eat more food for a set price, making it more cost-effective in terms of the amount of food he can eat for every dollar spent. This decision is consistent with rational decision-making, where people try to maximize their utility while staying within their means.

The high-end restaurant (selected by Economist A) may be less likely to be open when they both return to the economics conference the following year due to its higher prices. More expensive businesses tend to have a smaller consumer base, and their sustainability depends on regular business from those willing to pay higher costs. On the other hand, Economist B's all-you-can-eat buffet may be more resilient because it focuses on value and affordability and attracts a broader range of customers.

Part B

To determine whether she should return to teaching, we must evaluate opportunity costs, accounting profit, and economic profit.

1) Opportunity Costs: The opportunity cost of a decision is the value of the following best alternative given up. In this case, being a high school history teacher would have been the highest-paying alternative she could have pursued. Therefore, owning the arts and crafts shop was her best alternative, and her opportunity cost was $75,000.

2) Accounting Profit: Accounting profit is the difference between total revenue and explicit costs (direct costs such as wages, rent, and material expenses). In this case, her accounting profit would be:

Accounting Profit = Revenue - Explicit Costs

= $455,000 - ($40,000 * 4 + $200,000)

= $15,000

3) Economic Profit: Economic profit considers explicit and implicit costs (opportunity costs). Economic gain is given by:

Economic profit = Accounting Profit - Opportunity Cost

= $15,000 - $75,000

= -$60,000 (a negative value)

The calculations show that your mother's economic profit is negative, which means she is not covering her opportunity costs. This suggests that going back to teaching would be a more financially sound decision since it would provide her with a higher income compared to her current business venture. However, it's essential to consider non-financial factors, such as her passion for the arts and crafts store, her enjoyment of the work, and her role as a business owner. As explained in the Principles of Microeconomics textbook by Rittenberg and Tregarthen (2012), opportunity cost is the value of the following best alternative given up. For instance, in this scenario, the opportunity cost of owning the arts and crafts shop is the highest-paying alternative your mother could have pursued, which would be teaching high school history.