A potential entrepreneur is trying to decide whether to open a new health spa. She currently makes $35,000 per year as an aerobics instructor and will have to give up this job if she opens the new health spa. If she chooses to open the spa, it will cost her $200,000 per year in rent and other operating expenses. a. What are her opportunity costs? Give an example. b. How much would she need to make in revenues to earn positive economic profits?
A potential entrepreneur is trying to decide whether to open a new health spa. She currently makes $35,000 per year as an aerobics instructor and will have to give up this job if she opens the new health spa. If she chooses to open the spa, it will cost her $200,000 per year in rent and other operating expenses. a. What are her opportunity costs? Give an example. b. How much would she need to make in revenues to earn positive economic profits?
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 5SQP
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A potential entrepreneur is trying to decide whether to open a new health spa. She currently makes $35,000 per year as an aerobics instructor and will have to give up this job if she opens the new health spa. If she chooses to open the spa, it will cost her $200,000 per year in rent and other operating expenses.
a. What are her
b. How much would she need to make in revenues to earn positive economic
profits?
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