Which of the following is most likely to be an implicit cost?* rental income foregone on assets owned by the firm salaries paid to the firm’s board of directors transportation cost on raw materials interest payments on an outstanding loan of the firm
Which of the following is most likely to be an implicit cost?*
rental income foregone on assets owned by the firm
salaries paid to the firm’s board of directors
transportation cost on raw materials
interest payments on an outstanding loan of the firm
Economic profit is frequently*
greater than total revenue.
defined as total revenue minus total fixed cost.
irrelevant to the owner of a firm who is concerned instead with accounting profits.
less than accounting profit.
From an economics perspective, accounting methods tend to*
overstate
overstate profits and understate losses.
understate profits and overstate losses.
understate profits and losses.
Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her $50,000 per year job as an accountant. Your aunt’s
the accounting costs.
the accounting costs and the implicit costs.
all economic costs.
none of the above
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