Asked by Ramanan Srinivasagopalan on Jun 24, 2024
Verified
Refer to Scenario 7.2. During the year your economic costs were
A) $70,000.
B) $60,000.
C) $50,000.
D) $20,000.
Economic Costs
The total expenses incurred in producing a good or service, including opportunity costs.
Total Revenue
The overall amount of money earned by a business from the sale of its goods or services, calculated as the product of price times quantity sold.
- Gain an understanding of the notion of economic expenditures comprising explicit and implicit costs.
Verified Answer
CC
Cynthia CastelanJun 25, 2024
Final Answer :
A
Explanation :
Economic costs include both explicit costs (like rent and supplies) and implicit costs (like the forgone return on your own capital). Here, explicit costs are $50,000 and implicit costs are $20,000, totaling $70,000.
Learning Objectives
- Gain an understanding of the notion of economic expenditures comprising explicit and implicit costs.