WHICH OF THE FOLLOWING CONCEPTS OF PROFIT TAKES INTO ACCOUNT THE OPPORTUNITY COST OF CAPITAL A. MANAGERIAL PROFIT B. FINACIAL PROFIT C. ECONOMIC PROFIT D. ACCOUNTING PROFIT
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WHICH OF THE FOLLOWING CONCEPTS OF PROFIT TAKES INTO ACCOUNT THE
A. MANAGERIAL PROFIT
B. FINACIAL PROFIT
C. ECONOMIC PROFIT
D. ACCOUNTING PROFIT
Step by step
Solved in 3 steps
- Distinguish between explicit and implicit costs, giving examples of each. Why does the economist classify normal profit as a cost? Is economic profit a cost of production? Explain why or why not.A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Identify the stages of production in the diagram and explain why the firm still hire labour even though it is in the range of diminishing returns. What is the number of workers after which diminishing marginal returns starts? Is this a short run or long run phenomenon? Labour (units) 1 2 3 4 5 6 7 8 9 Total Product (TP) in Units 8 15 24 30 35 37 38 38 36 Average Product (AP) in units 8 7.5 8 7.5 7 6.17 5.43 4.75 4 Marginal Product (MP) in units 8 7 9 6 5 2 1 0 -2EM.19 Billy is an economics student and can use a practice exam to test his knowledge. After one hour of studying, he scores 50% on the exam. After two hours, he scores 75%. After three hours, he scores 85%. After four hours, he scores 90%. What economic concept is most clearly illustrated here? a diminishing marginal returns b worker fatigue c input inefficiency d opportunity cost
- Discuss the impact of long run on cost of doing business.Discus demand and supply factors of production in theory of the firm and provide examplesThe following is cost information for the Creamy Crisp Donut Company Entrepreneur's potential earnings as a salaried worker - $60.000 Annual lease on building = $30,000 Annual revenue from operations = $250,000 Payments to workers = $100,000 Utilities (electricity, water disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 If, other things equal, Creamy Crisp's revenue rose to $284.000 A. its implicit costs would exceed its economic costs B.it would earn a normal profit but not an economic profit C. it would suffer an economic loss D. it's accounting profit would fall to $0
- (Scenario: Accounting and Economic Profit) Use Scenario: Accounting and Economic Profit. What is the opportunity cost of Wang's $100,000 inheritance being used to start his business?Scenario: Accounting and Economic ProfitRather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. In his first year, his revenue was $150,000.2.1 Discuss the relationship that exists amongst the three short-run total cost curves.Motivate your answer with the aid of a diagram. 2.2 Explain in detail, the shape of the individual supply of labor curve. Illustrate youranswer with the aid of a diagram.The marginal productivity theory is used to assess how many units of a factor of production, such as labour, will be employed by a firm. Explain 2 assumptions of this theory and the limitation if those assumptions.
- 1. Production, Costs, and Perfect Competition: Firm in the Short Period a. data: (1) K = 7 and the price of capital = $2.00 (2) quantity produced 0 1 2 3 4 5 6 7 labor input 0 2 5 9 14 20 27 35 price of labor = $2.00 b. questions: (1) Derive the ATC, AFC, AVC, and MC curves. (2) Derive the marginal product schedule for labor and show why it makes the marginal cost curve slope upward. (3) If the market price is $12.00, how would the firm supply and what would be its economic profits? (4) If the market price is $2.00, how much would the firm supply and what would be its economic profits? (5) Derive the firm’s supply curve and explain its shape.Distinguish between explicit and implicit costs, giving examples of each. What are some explicit and implicit costs of attending college? Why does the economist classify normal profit as a cost? Is economic profit a cost of production?2.1 Discuss the relationship that exists amongst the three short-run total cost curves. Motivate your answer with the aid of a diagram. (15)2.2 Explain in detail, the shape of the individual supply of labor curve. Illustrate your answer with the aid of a diagram.
