"Economic profits are less than or at most equal to accounting profits." Do you agree or disagree? Explain
What will be an ideal response?
Agree. Economic profits are accounting profits less implicit costs, or the opportunity costs of inputs. Since the opportunity costs of capital and labor inputs are never negative, economic profits are less than or at most equal to accounting profits.
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Barriers to entry are forces that:
A. promote a more efficient allocation of resources across the economy. B. limit the government from intervening in markets. C. limit consumers from purchasing new products. D. limit new firms from joining an industry.
In the figure above, the curve labeled "W" can be a
A) monopoly's demand curve. B) monopoly's marginal revenue curve. C) perfectly competitive firm's demand curve. D) perfectly competitive firm's marginal revenue curve.
George Carlson wears cuff links with his dress shirts and he loves the new pair his wife bought him. He adds it to his collection, which he now values at $650 . Before the new purchase, he valued the collection at $575 . What can we say about the marginal utility of the new cuff links to him? a. The marginal utility of the new pair is $650 and it's higher than the marginal utility of any pair he
already had. b. The marginal utility of the new pair is $650 and it's lower than the marginal utility of any pair he already had. c. The marginal utility of the new pair is $75 . d. The marginal utility of the new pair is $575 and it's higher than the marginal utility of any pair he already had. e. The marginal utility of the new pair is $75 and it's higher than the marginal utility of any pair he already had.
A local fast-food restaurant mails out coupons for a free sandwich to every home in the community. The opportunity cost of redeeming the sandwich for someone who was on a diet might be:
A. not eating because you are on a "get fit for the summer" diet plan. B. lost wages due to spending time in a long line instead of eating a Healthy Choice meal in your office. C. eating a "Tough Man's Burger," which is one of your favorite fast food options. D. There was no opportunity cost for the sandwich because it was free.