Economics Today The Micro View Actual Test Bank Tested Questions With Verified Solutions

ECONOMICS TODAY THE MICRO VIEW
ACTUAL TEST BANK TESTED QUESTIONS
WITH VERIFIED SOLUTIONS

●● What is a companies profit?
Answer: the amount of money a company makes after they paid their
expenses
Revenue-costs=


●● What is the difference between accountants and economists?
Answer: accountant look at only Explicit costs, where as economists
look at both explicit and implicit costs


●● describe explicit costs
Answer: explicit costs (aka out of pocket costs) are payments that are
made for using the resources of others. For example an explicit cost for a
company may be their rent or how much it costs them to buy their
materials.


●● describe implicit costs
Answer: implicit costs are the opportunity costs firms "pay" for using
their own resources. For example time, forgone rent, and forgone wages.

, ●● total revenue (TR)-economic costs (explicit and implicit)=
______________________
Answer: economic profit


●● total revenue (TR)-accounting costs (explicit only)=
______________________
Answer: accounting profit


●● if a company is making no economic profit then....
Answer: the company is making a normal profit


●● What is normal profit?
Answer: normal profit is what a firm makes when they sell the exact
same product as another firm. The firm will break even (hit equilibrium)
and make no economic profit. (This is in a efficient competitive market )


●● What is the main goal of every business?
Answer: to maximize profit!!!
MR=MC


●● To earn profit, firms must make _____________
Answer: outputs