Refer to Scenario 13-3. Ziva's economic profit from farming equals a. - $80. b. $170. c. - $130. d. $130.

a. - $80.

Explanation:

Ziva's economic profit = Revenue - (explicit costs + implicit costs)

Revenue = $300

Explicit costs=$130

Implicit cost=$25*10 = $250

Ziva's Economic Profit = $300 - ($130+$250)

=$300-$380

Ziva's Economic Profit=-$80.

Explicit cost is the same as accounting costs. This include cost of seeds (i. e $130), wages paid to workers, rent paid for farm land, etc.

Implicits costs on the other hand is called opportunity cost or alternative forgone.

The $25 per hour forgone by working on the farm land is implicit cost.