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lemonscorpion281Lv1

6 Oct 2020

What are implicit costs? Do implicit costs contribute to the opportunity cost of production? Should an implicit cost be counted as cost? Give three examples of implicit costs. Does the firm's accounting statement take implicit statements into account? Why or why not?

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sheikhaasif12345Lv10

24 Sep 2021

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CT #4 Should the club cover explicit and implicit costs? Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club's explicit costs and implicit costs and then make a recommendation whether ticket prices should cover the explicit costs, the implicit costs, or both explicit and implicit costs. Give the club three examples of each type of cost. What is your recommendation for ticket pricing: should they cover explicit costs, implicit costs, or both? Why? Your response must be at least three paragraphs in length and no less than 200 words.

emeraldbeaver703

26. To the economist total cost includes

A. explicit and implicit costs.

B neither implicit nor explicit costs.

C. implicit, but not explicit, costs.

D. explicit, but not implicit, costs.

27. Accounting profits are typically

A. greater than economic profits because the former do not take explicit costs into account

B. equal to economic profits because accounting costs include all opportunity costs.

C. smaller than economic profits because the former do not take implicit costs into account.

D. greater than economic profits because the former do not take implicit costs into account.

28. Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were

A. $100,000 and its economic profits were $0.

B. $200,000 and its economic profits were $0.

C. $100,000 and its economic profits were $100,000.

D. $0 and its economic loss was $200,000.

29. The basic difference between the short run and the long run is that

A. all costs are fixed in the short run, but all costs are variable in the long run.

B. the law of diminishing returns applies in the long run but not in the short run.

C. at least one resource is fixed in the short run, while all resources are variable in the long run.

D. economies of scale may be present in the short run but not in the long run.

30. The law of diminishing returns indicates that

A. as extra units of a variable resource are added to a fixed resource, marginal product will decline beyond some point.

B. because of economies and diseconomies of scale, a competitive firm's long-run average total cost curve will be U-shaped.

C. the demand for goods produced by purely competitive industries is downsloping.

D. beyond some point, the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction.