The reason economists and accountants have problems using cost analysis in the real world is that:
A. although explicit costs do not show up in accounting profits, they nevertheless affect managerial decisions.
B. economists do not believe in the existence of explicit costs.
C. explicit costs cannot be measured.
D. although implicit costs do not show up in accounting profits, they nevertheless affect managerial decisions.
Answer: D
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According to the rule of 70,
a. if a country is growing at 14% per year, its output will double in approximately 5 years. b. if a country is growing at 10% per year, its output will double in approximately 7 years. c. if a country is growing at 2% per year, its output will double in approximately 35 years. d. all of the above are true.
Which of the following describes adverse selection in the insurance market?
a. The buyer has more information than the seller about whether they are high or low risk. b. The buyer behaves in a way they would not behave if they did not have insurance. c. The seller has more information about whether a buyer is high or low risk. d. The buyer and the seller know whether the buyer is high or low risk.
Demand deposits are
a. coins and currency b. the same as time deposits c. included in M2 and M3 but not M1 d. gold bars in the Federal Reserve System e. funds in checking accounts
The infant industry argument can be justified because
A. Government may choose to protect industries, which places heavy import burdens on the economy. B. The government may not be able politically to end protectionism even when protectionism is no longer justified. C. A new industry may never develop in a protected, noncompetitive environment. D. A new industry may be difficult to start in the face of existing foreign competition.