To calculate Malian's economic profit or loss, we need to consider both her explicit costs (the money she spent on manufacturing equipment and other business inputs) and her implicit costs (the opportunity cost of her quitting her job and using her savings).

1. Calculate the explicit costs:
The explicit costs are the costs of the manufacturing equipment and other business inputs. According to the question, Malian used all her savings to purchase manufacturing equipment and spent $200,000 on other business inputs. So, the total explicit costs are $200,000.

2. Calculate the implicit costs:
The implicit costs are the opportunity costs of quitting her job and using her savings. Malian was earning $130,000 per year at her job and $1,000 per year in interest on her savings. So, the total implicit costs are $130,000 (salary) + $1,000 (interest) = $131,000.

3. Calculate the total costs:
The total costs are the sum of the explicit and implicit costs. So, the total costs are $200,000 (explicit costs) + $131,000 (implicit costs) = $331,000.

4. Calculate the economic profit or loss:
The economic profit or loss is the revenue minus the total costs. According to the question, Malian's revenue the first year is $350,000. So, the economic profit or loss is $350,000 (revenue) - $331,000 (total costs) = $19,000.

So, Malian makes an economic profit of $19,000. Therefore, the correct answer is c. $19,000.

Question

To calculate Malian's economic profit or loss, we need to consider both her explicit costs (the money she spent on manufacturing equipment and other business inputs) and her implicit costs (the opportunity cost of her quitting her job and using her savings).

1. Calculate the explicit costs: 
   The explicit costs are the costs of the manufacturing equipment and other business inputs. According to the question, Malian used all her savings to purchase manufacturing equipment and spent $200,000 on other business inputs. So, the total explicit costs are $200,000.

2. Calculate the implicit costs: 
   The implicit costs are the opportunity costs of quitting her job and using her savings. Malian was earning $130,000 per year at her job and $1,000 per year in interest on her savings. So, the total implicit costs are $130,000 (salary) + $1,000 (interest) = $131,000.

3. Calculate the total costs: 
   The total costs are the sum of the explicit and implicit costs. So, the total costs are $200,000 (explicit costs) + $131,000 (implicit costs) = $331,000.

4. Calculate the economic profit or loss: 
   The economic profit or loss is the revenue minus the total costs. According to the question, Malian's revenue the first year is $350,000. So, the economic profit or loss is $350,000 (revenue) - $331,000 (total costs) = $19,000.

So, Malian makes an economic profit of $19,000. Therefore, the correct answer is c. $19,000.

Knowee AI · Accepted Answer

To calculate Malian's economic profit or loss, we need to consider both her explicit costs (the money she spent on manufacturing equipment and other business inputs) and her implicit costs (the opportunity cost of her quitting her job and using her savings).

1. Calculate the explicit costs: 
   The explicit costs are the costs of the manufacturing equipment and other business inputs. According to the question, Malian used all her savings to purchase manufacturing equipment and spent $200,000 on other business inputs. So, the total explicit costs are $200,000.

2. Calculate the implicit costs: 
   The implicit costs are the opportunity costs of quitting her job and using her savings. Malian was earning $130,000 per year at her job and $1,000 per year in interest on her savings. So, the total implicit costs are $130,000 (salary) + $1,000 (interest) = $131,000.

3. Calculate the total costs: 
   The total costs are the sum of the explicit and implicit costs. So, the total costs are $200,000 (explicit costs) + $131,000 (implicit costs) = $331,000.

4. Calculate the economic profit or loss: 
   The economic profit or loss is the revenue minus the total costs. According to the question, Malian's revenue the first year is $350,000. So, the economic profit or loss is $350,000 (revenue) - $331,000 (total costs) = $19,000.

So, Malian makes an economic profit of $19,000. Therefore, the correct answer is c. $19,000.

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