To Earn Money, You Decide to Open Up a Popcorn

question 5

Essay

To earn money, you decide to open up a popcorn stand at your student union.At the end of your first year of operation, your financial condition is as follows: Assume that the opportunity cost of your time is zero.
$$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Purchase of popcorn making } \\\text { machine }\end{array} & \$ 5,000 \\\hline \text { Purchase of popping corn } & \$ 1,000 \\\hline \text { Revenue from sale of popcorn } & \$ 5,000 \\\hline\end{array}$$ (a) Did you run a deficit or a surplus during your first year?
(b) Assuming a four-year useful life for your popcorn-making machine, how does your answer to (a) change if you evenly depreciate the value of your machine?
(c) How do your answers to (a) and (b) relate to the government's budget balance calculations? Explain.

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Definitions:

Parametric Counterpart

Refers to statistical tests or models that assume a certain distribution shape for the underlying data, as opposed to non-parametric methods which do not.

Kruskal-Wallis Test

A nonparametric test used to determine if there are statistically significant differences between two or more groups of an independent variable on a continuous or ordinal dependent variable.

P-value

A statistical measure that helps scientists determine the significance of their research results, indicating the probability of observing the results if the null hypothesis is true.

Coffee Shop

A retail establishment that sells coffee, tea, and other beverages, often accompanied by snacks or light meals.