What are the items that make opportunity cost differ from the accountant's measure of cost?
What will be an ideal response?
A firm's opportunity cost includes the cost of using resources bought in the market, owned by the firm and supplied by the firm's owner. Economists and accountants both include the price of resources bought in the market as costs. But accountants omit costs included by economists. For instance, use of a building the owner has already purchased has an opportunity cost that accountants do not include. Additionally the normal profit, interest foregone, and economic depreciation are other opportunity costs not recorded by an accountant.
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The income distribution in less-developed nations tends to be
a. more uneven than in developed economies b. less uneven than in developed economies c. similar to that in developed economies d. impossible to calculate e. not comparable because tax structures differ among countries
The Massachusetts Turnpike is a state toll-road where cars and trucks pay a fee in proportion to the distance they travel and the weight of the vehicle. The road was built with federal funds in the 1960s, but the state must pay for maintenance. Given what you know about regulation, what do you think the toll charge for a particular car or truck represents?
a. the average variable cost of maintenance b. the marginal cost of maintenance c. the monopoly price d. price discrimination against bus passengers e. a lump-sum tax
Which of the following statements is true of dynamically complete models?
A. There is scope of adding more lags to the model to better forecast the dependent variable. B. The problem of serial correlation does not exist in dynamically complete models. C. All econometric models are dynamically complete. D. Sequential endogeneity is implied by dynamic completeness..
A perfect-price-discriminating equilibrium maximizes
A) consumer surplus. B) the associated deadweight loss. C) the market inefficiency. D) total welfare.