B. As extra units of a variable resource are added to a fixed resource, the extra or marginal product will decline beyond some point.
Which of the following definitions is correct?
B. Economic profit = accounting profit – implicit costs.
Economic profits are calculated by subtracting
C. Explicit and Implicit costs from total revenue
Normal Profit is:
B. The return to the entrepreneur when economic profits are zero.
To economists, the main difference between 'the short run' and 'the long run' is that:
B. In the long run, all resources are variable while, in the short run, at least one resource is fixed.
'Economies of scale' refers to:
C. The fact that large producers may be able to use more efficient technologies.
Economic cost can best be defined as:
A. Compensations which must be received by resource owners to ensure their continued supply.
The basic characteristic of the short run is that:
C. The firm does not have sufficient time to change the size of its plant.
Suppose that a business incurred implicit costs of $200 000 and explicit costs of $1 million in a specific year. It the firm sold 4000 units of its output at $300 per unit, its accounting profits were:
C. $200 000, and its economic profits were zero.
Which of the following constitutes an implicit cost to the Jackson Manufacturing Company?
C. Depreciation charges on company - owned equipment.