Please answer the below questions.

1.

Suppose a person quits a job earning $45,000 per year and starts a business with $120,000 withdrawn from amoney-market account earning 8 percent per year.

The implicit cost of the business is $_________for theentrepreneur's time plus $________for theentrepreneur's funds (enter your response as an integer).

2.

Compute the Cost. Edward the entrepreneur takes 2 hours to cut a lawn and he cuts 500 lawns per year. He usessolar-powered equipment(truck andmower) that will last foreverand could be sold at any time for$20,000. Edward could earn $8 per hour as a pedicurist. The interest rate is 10 percent.

a. Given his current outputlevel, his marginal cost is $_______ (enter your response to the nearestdollar) and his average cost is $______ (enter your response to the nearest dollar).

b. Suppose he decides to reduce the number of lawns cut byhalf, to 250 per year. His new marginal cost is $________(enter your response to the nearestdollar) and his new average cost is $_____ (enter your response to the nearest dollar).