What is the difference between economic and accounting profit? Why is a distinction between them important?
What will be an ideal response?
An economic profit includes implicit costs and accounting profit does not. A distinction between them is important because an accounting profit is a relative amount of money. Some amount of accounting profit may or may not be a sufficient amount of profit to keep an entrepreneur in his/her present line of business. Whereas an economic profit, if it is earned, is always good news because it is an amount of profit above the entrepreneur's opportunity cost.
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A lump-sum tax is:
A. a head tax. B. the most efficient form of taxation. C. a tax that charges the same amount to each taxpayer. D. All of these statements are true.
A factor that limits the amount of saving in developing countries is the fact that:
A. The banking system does not encourage saving B. There is too much foreign aid so savings is not needed C. The level of aggregate domestic output is low D. The government controls financial institutions and makes it difficult for people to save
You have decided to purchase, directly from the French manufacturer, a helicopter that costs 800,000 euros. At the equilibrium exchange rate between dollars and euros in Figure 36.1, this purchase will cost you
A. $1,600,000. B. $800,000. C. $200,000. D. $400,000.
When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $630. When the monopolist sells three units of output, the price per unit is
A. $210. B. $230. C. $300. D. $630.