Option D
Economic profit = Total Revenue-(explicit costs+implicit costs)
Explicit costs refers to direct paid out costs, implicit costs are opportunity costs forgone.
Explicit costs are also referred to accounting cost
Hence economic profit includes accounting cost and opportunity costs forgone
The costs economists use in the concept of economic profit are: accounting costs. ) strictly dollar...
Which of the following definitions is correct? Economic profit - accounting profit - implicit costs Economic profit - accounting profit = explicit costs Economic profit - implicit costs = accounting profit Accounting profit + economic profit = normal profit Economic profit - accounting profit = normal profit
The difference between economic profit and accounting profit is that economic profit is calculated based on both implicit and explicit costs whereas accounting profit is calculated based on explicit costs only. True False
If explict costs are $160,000 and implict costs are $72,000, economic profit is accounting profit by
4. Economists measure "cost" as the full "opportunity cost" (op cost) associated with any given use of some set of resources. "Op cost" is measured as what is forgone by not putting these resources to their next best alternative use (i.e. the benefits that must be forgone elsewhere if the resources in question are to be used for this purpose instead). Suppose you get to a point where doing "one more unit" of something (such as pollution clean-up) incurs opportunity...
Is it better to have an accounting profit or economic profit? Why? costs have Drag word(s) below to fill in the blank(s) in the passage. It is better for a company to have an profit because it means both been the total revenue and the company is still profitable. An into consideration the explicit costs of doing business. p rofit only takes accounting * implicit and explicit * added to * explicit * economic subtracted from * implicit * profit*...
Suppose that explicit costs are $10,000. If accounting profit is $37,000 and economic profit is $37,000, then implicit costs equal
What is the difference between accounting profit and economic profit? I was asked about how to interpret the notion of normal rate of return and the term opportunity cost? I have a pretty good idea about both but wanted to see and experts thought or interpretation.
Which of the following statements is true? Group of answer choices Economic profits include opportunity costs. Economic profits ignore opportunity costs. Accounting profits include all of the opportunity costs. Economists consider sunk costs in their decision making
1. Economists think in terms of key concepts. List the concepts that economists think in terms of. Define opportunity cost. Use the concept of opportunity cost to explain why some things are not done. Explain why economists consider costs and benefits, instead of only benefits. Give an example from your life where you have considered both costs and benefits. Explain why it is important to consider unintended effects.
6. The role of economic profit Suppose that a company is making positive economic profit. Which one of the following statements must be true? O 0 0 0 Its accounting profit is less than its cost of equity capital. Its accounting profit equals its economic profit. Its economic profit is greater than its accounting profit. Its accounting profit is greater than its cost of equity capital. Why do newspapers, financial statements, and annual reports usually report a company's accounting profit...