What is the relationship between accounting and economic profits?
A. Economic profits are always negative.
B. Accounting profits are always larger than economic profits.
C. There is no relationship between economic and accounting profits.
D. Economic profits are always larger than accounting profits.
Answer: B
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The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve. The marginal cost borne by producers when 200 billion kilowatt hours are produced is
A) 0¢ per kilowatt. B) 10¢ per kilowatt. C) 20¢ per kilowatt. D) 15¢ per kilowatt. E) 5¢ per kilowatt.
All bonds that will not be held to maturity have interest rate risk which occurs because of the change in the price of the bond as a result of
A) interest-rate changes. B) changes in the coupon rate. C) default of the borrower. D) changes in the asset's maturity date.
Harold, a delivery man, washes and irons his own shirts. Sarah, his boss, sends her clothes to a laundry. Which is the most plausible economic explanation for this difference?
a. Harold must enjoy ironing more than Sarah does. b. Harold must be better at ironing than Sarah is. c. The opportunity cost of ironing is greater for Harold. d. Harold probably has an absolute advantage in ironing. e. Sarah has a higher opportunity cost of laundering her clothes than Harold does.
Assume that Rudolf withdraws $600 from his bank account which was earning him 10 percent interest per annum to buy a high-end digital camera. The bank interest forgone by him will be the opportunity cost of this purchase
Indicate whether the statement is true or false