A student might describe information about the costs of production as
a. dry and technical.
b. boring.
c. crucial to understanding firms and market structures.
d. All of the above could be correct.
d
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Economic profit is equal to
a. total revenue minus the explicit cost of producing goods and services. b. total revenue minus the implicit cost of producing goods and services. c. total revenue minus the opportunity cost of producing goods and services. d. average revenue minus the average cost of producing the last unit of a good or service. e. total revenue minus depreciation.
Table 22.1Assume an apple farmer incurs the following costs and revenuesFertilizer$200Seeds$75Water$250Wages$750Property taxes$600Interest payments on borrowed funds$1,200Sales of apples$4,000The accounting profit is equal to
A. $2,125. B. $4,000. C. $925. D. $1,525.
(Consider This) Past costs that are not affected by new decisions are known as:
A. variable costs. B. fixed costs. C. marginal costs. D. sunk costs.
Sunk costs
A) are costs associated with repairing something you already own. B) are important for optimal decision making. C) are costs that have already been paid and cannot be recaptured in any significant way. D) are costs that firms sink into marketing.