Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 1.4P
To determine
Acceptability of the argument.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The way in which accountants and economists
analyse the costs of a firm differ. Discuss the
difference between accounting costs and
economic costs of a firm.
What is the difference between economic costs and accounting costs? Explain it in your own words and not from google.
Consider this statement “Total output starts falling when diminishing returns occur.” Do you agree or disagree. Please explain.
Chapter 7 Solutions
Principles of Economics (12th Edition)
Knowledge Booster
Similar questions
- Explain the difference between accounting and economic profit. Give two examples of when they differ.arrow_forwardDistinguish between implicit and explicit costs and give examples of each. In addition, explain how explicit and implicit costs affect the distinction between economic profit and accounting profit. What explains the distinction between the two measures of profit?arrow_forwardLooking to see how to figure outarrow_forward
- a) The owners of firms in the real world would generally expect (in the long run at least) to have some positive of profits on their accounting statements. However, in economic models we usually assume that firms will be willing to operate for zero economic profits even for the long term. Explain why this is the case.arrow_forwardWhich of the following is most likely to be an implicit cost?*rental income foregone on assets owned by the firmsalaries paid to the firm’s board of directorstransportation cost on raw materialsinterest 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 profits and losses.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 opportunity costs comprise*the accounting costs.the accounting costs and the implicit costs.all…arrow_forwardJoe quits his computer programming job, where he was earning a salary of $70,000 per year, to start his own computer software business in a building that he owns and was previously renting out for $22,000 per year in his first year of business he has the following expenses: salary paid to himself, $40,000, rent, 50; and other expenses, $20,000. Find the accounting cost and the economic cost associated with Joe's computer software business. (Enter numeric responses using an integer) The accounting cost of Joe's business is 1 (Enter your response as an integer)arrow_forward
- Joe quits his computer programming job, where he was earning a salary of $70,000 per year, to start his own computer software business in a building that he owns and was previously renting out for $20,000 per year. In his first year of business he has the following expenses: salary paid to himself, $45,000; rent, $0; and other expenses, $40,000. Find the accounting cost and the economic cost associated with Joe's computer software business. (Enter numeric responses using an integer.) The accounting cost of Joe's business is $ (Enter your response as an integer.) es Get more help Clear all Check answerarrow_forwardJason owns a small pizza restaurant, where he works full time in the kitchen. His total revenue last year was $136,000, and his rent was $2,610 per month. He pays his one employee $2,200 per month, and the cost of ingredients and overhead averages $960 per month. Jason could earn $32,600 per year as manager of al competing pizza restaurant nearby. What's Jason's accounting profit for the entire year? Your Answer: Answerarrow_forwarda software production firm, average product has started falling and total output indicated diminishing trend. The production manager Mr. Yahya called you and asked you to see the condition of marginal product. You analyzed the situation and reported that marginal product falling more than average product. Mr. Yahya got surprised. In your opinion which situation the firm is heading to?arrow_forward
- Do not use Aiarrow_forwardJoe quits his computer programming job, where he was earning a salary of$70,000per year, to start his own computer software business in a building that he owns and was previously renting out for$24,000per year. In his first year of business he has the following expenses: salary paid to himself,$42,500;rent, $0; and other expenses,$10,000. Find the accounting cost and the economic cost associated with Joe's computer software business. Accounting cost: ____ Economic Cost: _____arrow_forwardClassify the following costs as explicit or implicit. Explain your answer ABC Company spent $1000 for coffee and biscuits for their staff. Jim used $50000 from his savings account to buy a car for his business BHP paid interest on company issued bonds Frank spends 4 hours every weekend cleaning his officearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning