Part I: Explicit and implicit costs

Determine and explain whether each of the following is an explicit or implicit cost:

Explain the reason for your answer.

a) Income from wages that an owner could earn if he did not work for himself.

b.The payment of rent for a warehouse that is rented by the company.

c) The possible income received from the rental to another company of a building owned by the company that uses it as a warehouse for its own production.

d) Payments made for labor hired in the labor market.

Part II: Economic efficiency: profit or loss measures

Calculate the accounting profit or loss as well as the economic profit or loss in each of the following situations:

Present the procedure of your calculations to obtain the final result.

a. A company with total revenues of $ 130 million, explicit costs of $ 80 million, and implicit costs of $ 20 million

b.A company with total revenues of $ 145 million, explicit costs of $ 110 million, and implicit costs of $ 15 million

c. A company with total revenues of $ 110 million, explicit costs of $ 80 million, and implicit costs of $ 50 million

d. A company with total revenue of $ 350,000, explicit costs of $ 395,000, and implicit costs of $ 40,000