Which of the following is incorrect?
A. Accounting profits generally overstate economic profits.
B. Managers should only be interested in accounting profits.
C. Economic costs include not only the accounting costs but also the opportunity costs of the resources used in production.
D. Accounting profits do not take opportunity cost into account.
Answer: B
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The fair rules approach to fairness requires
A) that consumer surplus equal producer surplus. B) income transfers from rich to poor. C) property rights and voluntary exchange. D) that marginal cost equal marginal benefit. E) that consumer surplus exceed producer surplus because there are more consumers than producers.
A binding price ceiling is designed to:
a. increase efficiency. b. raise the price above the equilibrium price. c. keep the price below the equilibrium price. d. generate a surplus
Which of the following holds true?
A. There is no relationship between AP and AVC. B. When MP is rising AVC is falling, and when MP is falling AVC is rising. C. When AP is rising AVC is falling, and when AP is falling AVC is rising. D. When AP is rising AVC is rising, and when AP is falling AVC is falling.
Which of the following situations will arise in the domestic market following the imposition of an import ban?
A. imports increase, domestic production increases, prices increase B. imports increase, domestic production decreases, prices decrease C. imports decrease, domestic production increases, prices increase D. imports decrease, domestic production increases, prices decrease