What is the difference between the accountant's concept of profit and the economist's view of profit?
Accountants tend to include in TC contractual costs only. The economist measures TC as the cost of all the firm's inputs, including the opportunity cost of the capital or any other inputs, such as labor, provided by the firm's owners. Accounting profit is generally larger than economic profit, so that positive accounting profit may correspond to zero economic profit.
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Consider the figure? 4B-2. If the price is? $20, find the area that represents producer surplus.
A. Upper A plus Upper B. B. Upper C plus Upper D. C. Upper A plus Upper B plus Upper C. D. Upper F plus Upper E plus Upper D.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The "acceptable deaths" notion suggests that it is better to have the benefits of a good to the buyer and seller with a specified number of deaths,
A. than to prohibit the good's production and use entirely. B. in no circumstance. C. than to let the good be produced outside the US. D. but only if the deaths are of less desirable people.
If a firm sells 50 units of output at $9 per unit and 60 units of output when price is reduced to $8, its marginal revenue from selling the sixth unit is
A. $30. B. $450. C. $10. D. $480.