ECON 101 – Consider a small hair styling salon

Subject: Economics    / General Economics
Question
Worth 10 points
EXTRA CREDIT QUESTIONS

1.Consider a small hair styling salon. List some examples of explicit costs and
implicit costs of this business.
Scenario 13-22
Suppose that a small hair styling salon had revenues of $150,000 in a given year.
The owner spent $10,000 on utilities, $60,000 on supplies (shampoo, conditioner,
hair coloring and other chemicals, etc.), and $50,000 on equipment (mirrors, chairs,
scissors, curling irons, etc.), including maintenance. The owner could have earned
$50,000 working at another salon.
2. Refer to Scenario 13-22. What is the accounting profit for the hair styling salon?
3. Refer to Scenario 13-22. What is the economic profit for the hair styling salon?