Which of the following is true?
A) A firm's accounting profit is equal to its economic profit.
B) Opportunity costs are the same as explicit costs.
C) A firm's net income is the same as its accounting profit.
D) If a firm's accounting profits are positive, its economic profits must also be positive.
Answer: C
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In the figure above, which of the following represents a real flow of a factor of production?
A) Labor B) Wages C) Goods bought D) Services sold E) Firms' expenditures on factors of production
Jane is deciding whether to go to school for 8 weeks this summer. The cost of tuition and textbooks is $1,700 and housing and other expenses will cost her $600
If she does not go to school, she will live in her parents' house for free and they will cover her food and other expenses for her. Also, if Jane does not go to summer school she could work fulltime. But the best job she can get pays only $600 per week, and Jane would only agree to give up her free time for no less than $750 per week. However, if she goes to summer school, she'll have to spend 40 hours a week attending classes and studying. a) What will the summer school cost Jane in terms of money spent? b) What are the opportunity costs of going to summer school that Jane does not pay explicitly? Explain. c) What is Jane's total opportunity cost of going to school this summer? Explain your answer. d) Suppose that if Jane does not go to summer school, she will eventually take the classes anyway. What is Jane's marginal benefit of going to summer school? e) Suppose Jane decides to go to school in the summer. Explain her decision using the concepts of marginal cost and marginal benefit.