Table 22.1Assume an apple farmer incurs the following costs and revenuesFertilizer$200Seeds$75Water$250Wages$750Property taxes$600Interest payments on borrowed funds$1,200Sales of apples$4,000The accounting profit is equal to
A. $2,125.
B. $4,000.
C. $925.
D. $1,525.
Answer: C
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Cost-reduction generates
a. Increases in long-run profitability b. Increases in long-run profitability only if the cost reduction is difficult to imitate c. Decreases in long run profitability d. No change in profitability
Price floors are instituted because the government wants to:
a. help consumers. b. help producers. c. raise tax revenue. d. prevent imports. e. increase demand.
The specificfactors model is termed a "shortrun" model because:
a. labor cannot move from one activity to another. b. land resources can move from one activity to another . c. labor can move from one activity to another. d. land and capital cannot move from one activity to another .
Factor-price equalization theory predicts that with free trade the input prices within a country will become the same.
Answer the following statement true (T) or false (F)