Read each question carefully. Be sure to answer ALL 3 questions.

1. For the past 5 years, Sandi has worked as a data analyst earning $40,000 during her last year. She quit her job to start a consulting business. She has clients lined up and expects her revenue to be $70,000 in her first year. For her first year, she has rented equipment for $20,000, paid $3,000 for web access and hosting, $4,000 for the cost of phone and cable, and $2,000 for advertising. Sandi's uncle gave her $30,000, which she used to start her business. The current savings interest rate is 3%. Assume her business has been up and running for one year and revenue & costs were as expected. (Show all work step by step)

a.Calculate accounting profit.

b. Calculate economic profit.

c. Calculate normal profit.

d. Should Sandi stay in business? Explain.

2. The Artis Company hires employees at a wage rate of $10/hour. Other relevant data about the Artis Company is shown in the table below.

Employee Hours	Output	Marginal Product	Total Costs	Marginal Costs	Average Costs
0	0		100
2	20
4	50
6	90
8	80
10	60

a. What are the firm's fixed costs?

b. Fill in the table by calculating the marginal product, total costs, marginal costs, and average costs at each quantity of employee hours (round off to 2 decimals if needed)

c. Is the data in the table for the short-run or long-run? Explain.

3. Kamloops is in the interior of British Columbia which has become a prominent wine growing area due to its mild and dry climate. A new winery has incurred the costs listed below. For each cost, state whether it is a fixed or variable cost.

a. The salary paid to the vintner who is a full-time employee.

b. The cost of a grape picking machine used to pick some grape varieties.

c. The wages paid to seasonal grape pickers.

d. The capital used to purchase an additional 50 acres of land.(1 mark)

e. The cost of organic sprays to eliminate insect damage to the grapes.

f. The cost of the building with a wine tasting room.

g. The cost of the wine used for the tastings.