For most firms, the major difference between accounting profit and economic profit is that
a. explicit and implicit costs are included in the accounting profit while only explicit costs are included in economic profit.
b. accounting profit omits the salaries of managers, and therefore, it is generally greater than economic profit.
c. accounting profit is based on opportunity cost, whereas economic profit is based on market transactions.
d. accounting profit does not consider the opportunity cost of the firm's equity capital and, therefore, generally overstates economic profit.
D
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Which of the following is NOT an entitlement?
A) federal government salaries B) Medicare C) Medicaid D) Social Security
After reading an economics textbook about labor supply and utility maximization, Amelia Ruiz said, "I don't allocate my time like that.". Her professor replied,
a. "You caught us. Economists do not know what they are talking about.". b. "This proves that you will always choose to spend your time in nonmarket work.". c. "You act as if you allocated your time to derive the same expected net marginal utility from the last unit of time spent in each alternative use.". d. "Don't you want to use your unlimited resources to satisfy your finite wants?" e. "It is obvious that labor supply is a derived demand based on marginal revenue product.".