If the owner of a business pays himself no salary, then the accounting cost is zero, but the economic cost is positive.
This statement is... correct answers A. false because accounting costs include opportunity costs such as the value of the business owner's time.
B. true because economic cos...
ECON 300 Chapter 7 (100% Verified)
If the owner of a business pays himself no salary, then the accounting cost is zero, but the economic cost
is positive.
This statement is... correct answers A. false because accounting costs include opportunity costs such as
the value of the business owner's time.
B. true because economic costs include opportunity costs such as expenditures that cannot be recovered.
C. false because economic costs include the same costs as accounting costs.
D. false because accounting costs include explicit costs.
*E. true because economic costs include opportunity costs such as the value of the business owner's time.
A firm that has positive accounting profit does not necessarily have positive economic profit.
This statement is... correct answers *A. true because economic costs will be greater than accounting costs
if implicit costs exist.
B. false because accounting costs will be greater than economic costs if implicit costs exist.
C. true because accounting costs will be greater than economic costs if explicit costs exist.
D. true because economic costs will be greater than accounting costs if sunk costs exist.
E. false because economic costs will be greater than accounting costs if depreciation exists.
If a firm hires a currently unemployed worker, the opportunity cost of utilizing the worker's services is
zero.
, This statement is... correct answers A. false because the worker's new wages are an implicit cost.
B. false because the worker's time otherwise spent in unpaid household work has no value.
*C. false because the worker's time otherwise spent in leisure activities has value.
D. true because the worker's time otherwise has no value.
E. true because the worker's new wages are a sunk cost.
Joe quits his computer programming job, where he was earning a salary of $65,000 per year, to start his
own computer software business in a building that he owns and was previously renting out for $27,000
per year. In his first year of business he has the following expenses: salary paid to himself, $35,000; rent,
$0; and other expenses, $10,000. Find the accounting cost and the economic cost associated with Joe's
computer software business. (Enter numeric responses using an integer.) correct answers The accounting
cost of Joe's business is $
45000. (Enter your response as an integer.)
The economic cost of Joe's business is $
102000. (Enter your response as an integer.)
Which of the following is an example of a sunk cost? correct answers *A. The amount a company
originally paid for specialized equipment for a plant.
B.The amount a company pays for labor to produce its product.
C.The amount for which a company could rent equipment it owns to another company.
D.The opportunity cost of a company owner's time.
Jose rents office space for $20,000 per year. He uses the office to fill out tax returns for 1,000 clients per
year. If the office rent increases to $25,000 per year, the marginal cost of filling out tax returns will
correct answers A. increase by $5.
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