16. The main difference between economic profit and accounting profit is: A. Eco
ID: 1197750 • Letter: 1
Question
16. The main difference between economic profit and accounting profit is:
A. Economic profit only takes into account the cost of variable inputs
B. Accounting profit includes both explicit and implicit costs
C. Economic profit includes opportunity cost
D. Both are the same
18.
A firm is experiencing economies of scale when:
A. The average total cost of producing 2 different goods is lower when they are produced separately
B. Average total cost is falling as output is rising
C. The average total cost of producing 2 different goods is lower when they are produced together
D. Average total cost is rising as output is rising
A. Economic profit only takes into account the cost of variable inputs
B. Accounting profit includes both explicit and implicit costs
C. Economic profit includes opportunity cost
D. Both are the same
18.
A firm is experiencing economies of scale when:
A. The average total cost of producing 2 different goods is lower when they are produced separately
B. Average total cost is falling as output is rising
C. The average total cost of producing 2 different goods is lower when they are produced together
D. Average total cost is rising as output is rising
Explanation / Answer
16. The main difference between economic profit and accounting profit is:
" Economic profit includes opportunity cost". Option C
Economic profit consists of revenue minus implicit (opportunity) and explicit (monetary) costs; accounting profit consists of revenue minus explicit costs.
18. A firm is experiencing economies of scale when:
" Average total cost is falling as output is rising". Option B
Because The bigger the firm’s size, the lower its costs of production: this is called “economies of scale”
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