Distinguish between the economist’s definition of profit and the accountant’s definition. Which is superior for decision making?
What will be an ideal response?
Accounting profit is revenue minus actual, out-of-pocket costs. Economic profit is revenue minus total costs, including the opportunity cost of all factors. Accounting profit typically is greater than economic profit. Although more difficult to compute, economic profit is superior because it incorporates the concept of opportunity cost of resources, including capital and the owner’s forgone earnings.
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Which of the following would not be considered a "leisure" activity by economists?
A. Making dinner B. Going skiing C. Cleaning the bathroom floor D. Making a work call.
The international treaty established to negotiate lower trade restrictions is known as the
a. World Bank Act b. General Agreement on Tariffs and Trade (GATT) c. International Association for Free Trade (IAFT) d. Countries United for Free Trade (CUFT) e. International Development Fund
The natural rate of unemployment is closely associated with the short-run ups and downs of economic activity
a. True b. False Indicate whether the statement is true or false
Market demand
A. is the horizontal summation of the individual demand curves. B. shows how market purchases vary with price. C. slopes downward. D. both a and b E. all of the above