You are currently working as a Senior Economist for the Congressional Budget Office in Washington DC making $108,000per year.

Your lifelong ambition, however, has been to open your own cupcake store.You decide to quit your job as an economist to open your dream store near the River Walk in San Antonio.

You estimate that you will be able to sell 10,000 cupcakes per month at a price of $3.40 per cupcake.

You will have to paymonthlyrent of $5,000 for renting the retail space and will have other cash costs of $2,500per month(utilities etc.).The ingredients will cost you $2.00per cupcake.

a.Calculate yourmonthlyrevenue.

b.Calculate total implicit costs (monthly)

c.Calculate total explicit costs (monthly)

d.Calculate monthly accounting profits

e.Calculate monthly economic profits

f.Would an economist recommend that you start this business? Why or Why not?