The difference between economic profit and accounting profit is that economic profit is calculated based on both implicit and explicit costs whereas accounting profit is calculated based on explicit costs only
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following is true?
i. The supply of a good is inelastic if when its price changes, the percentage change in the quantity supplied exceeds the percentage change in price. ii. Price elasticity of supply equals the percentage change in the quantity supplied divided by the percentage change in price. iii. If demand is price elastic, a rise in price leads to a decrease in total revenue. A) only i B) only ii C) only iii D) i and ii E) ii and iii
Which of the statements below is primarily normative in nature?
A) There is an unequal distribution of income in the United States. B) The distribution of income is more unequal in the United States than it is in Japan. C) The inequality of income that exists in the United States is partly caused by an unequal distribution of wealth. D) The distribution of income in the United States should be more equal than it is.
Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What are Winston's economic profits?
A. $78,000 B. $142,000 C. $138,000 D. $150,000
The task of deciding which consumer gets each of the goods produced in a free-market economy is solved by
a. the price system. b. the industries which produce the goods. c. the central planners. d. citizens with political power.