(i). Explain the difference between accounting profit and economic profit. Include discussion of the distinction between explicit and implicit costs and how they relate to economic cost and opportunity cost.
(ii). suppose your aunt is thinking about opening a hardware store. She estimates that it would cost $ 500,000 per year to rent the store and buy the stock. In addition, she would have to quit her $ 510,000 per year job as an accountant.
What is your aunt's opportunity cost of running a hardware store for a year? If your aunt thought she could sell $ 510,000 worth of merchandise in a year, should she open the store? Explain.
(iii). Compare and contrast the two market structures: Perfect Competition and Monopoly, in line with main characteristics of them. Comment of the Price and profit maximising output level in the two structures.
(iv). which market structure is considered to be more efficient? Justify your answer
(v). List down two closest real world examples for each of these market structures.
(vi). Do you believe that the government should intervene to control the monopoly power in the market. You need to argue for/justify your answer.
(vii). in a free market system, why does the government have to provide certain goods and services using tax payers money? Is there any justification? Explain providing examples.