EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 8, Problem 1RQ
To determine
State some reasons for any firm to be concerned about its economic profits, and also about the
Expert Solution & Answer
Answer to Problem 1RQ
The accounting profits allow the firms to pay for their taxes and dividends from their surpluses, on the other hand, the economic profits imply that firm is able to utilize the resources available in a proper and optimum manner.
Explanation of Solution
While the profits from accounting determine the taxes and dividends, the economic profits imply that the factors employed in the firm are properly utilized in production.
This means that when the factors employed are not properly utilized in the production process the company automatically experiences deterioration in its economic profits, and thereby affecting its production capabilities.
Economics Concept Introduction
Introduction: According to the utility maximization concept, it is assumed that the consumer decides to spend each and every penny of his available income on the products that he believes yields the maximum
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Students have asked these similar questions
What costs and revenues do economists include when calculating profit that accountants don’t include?
Economists and accountants calculate profit with the same costs and revenues. The only difference is that economists work with predicted costs and revenues for the future, whereas accountants work with costs and revenues from previous years.
In addition to the explicit costs and revenues used by accountants, economists include all implicit costs and revenues when calculating profit. This means that they include opportunity costs and changes in the value of any assets owned by the firm.
In addition to the implicit costs and revenues used by accountants, economists include all explicit costs and revenues when calculating profit. This means that they include labor costs and changes in the value of any assets owned by the firm.
In addition to the explicit costs and revenues used by accountants, economists include all implicit costs and revenues when calculating…
Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true.
Zero economic profit implies zero accounting profit.
Microeconomic
Chapter Eight
Distinguish between a firm's explicit costs and its implicit costs and between a firm's accounting profit and its economic profit.
Chapter 8 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 8.3 - Prob. 1MQCh. 8.3 - Prob. 2MQCh. 8.3 - Prob. 1.1MQCh. 8.3 - Prob. 2.1MQCh. 8.4 - Prob. 1TTACh. 8.4 - Prob. 2TTACh. 8.4 - Prob. 1MQCh. 8.4 - Prob. 2MQCh. 8.5 - Prob. 1TTACh. 8.5 - Prob. 2TTA
Ch. 8.5 - Prob. 1.1TTACh. 8.5 - Prob. 2.1TTACh. 8.5 - Prob. 1MQCh. 8.5 - Prob. 2MQCh. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQCh. 8 - Prob. 8.1PCh. 8 - Prob. 8.2PCh. 8 - Prob. 8.3PCh. 8 - Prob. 8.4PCh. 8 - Prob. 8.5PCh. 8 - Prob. 8.6PCh. 8 - Prob. 8.7PCh. 8 - Prob. 8.8PCh. 8 - Prob. 8.9PCh. 8 - Prob. 8.10P
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