1. Briefly define the following terms: a. Explicit costs b. Implicit costs c. Normal profit d....

1. Briefly define the following terms:

a. Explicit costs

b. Implicit costs

c. Normal profit

d. Accounting profit

e. Total product, average product, and marginal product

Solutions

Expert Solution

1a. Explicit Costs- The costs where the payments are made directly for tangible assets or work and are clearly defined are called as explicit costs. These costs are paid directly. Examples of explicit costs include rents, salaries, raw material costs,wages etc.

1b)Implicit Costs- Implicit costs are those costs where cash is not paid immediately and no outflow of case takes place. Implicit costs are costs which a firm gives up when it uses a productive asset which it uses instead of renting or selling the asset. Implicit costs are opportunity costs given up by using the productive asset. They are trade-off costs. for eg: the decision to invest in the part stock of a company instead of acquiring the entire company. The giving up of earnings from the entire company is the implicit costs. If a business buys a car and does not rent it out and uses it for its employee, the earnings forgone from renting the car is implicit costs.

1c)Normal Costs- Normal costs are the costs occurring during the normal course of the business. For eg: labour costs, material costs, overheads etc are an example of normal costs.These costs occur during the daily operations of a company.

1d)Accounting profit- Accounting profit is the income left behind after deducting all expenses from the revenue obtained. Accounting costs considers explicit costs and implicit costs are not considered.

1e)Total product- Total product is the amount of products obtained from fixed inputs factors and variable factors. The amount of product changes with changes in variable factors such as materials or labor.

Average product - Average product is the total amount of products produced divided by the amount of factors used.

Marginal Product- Marginal product is the increase in the total amount of product when a single unit of a factor is increased. It measures the change in output due to a unit increase in inputs.

keosha answered 2 hours ago

Next > < Previous

Related Solutions

1. Describe the impact of explicit and implicit costs in calculating accounting profit and economic profit....

1. Describe the impact of explicit and implicit costs in calculating accounting profit and economic profit. 2. Assume you are a business manager for a firm that does a few million dollars worth of business each year. Select the profit measure (accounting profit or economic profit) you believe provides the most helpful information in making business decisions, and explain why? Note: once again, no hedging your bet here by selecting both measures or combinations of both measures. :-) Select one...

28. Total revenue minus explicit costs equal: a. Accounting profit b. Normal profit c. Economic profit...

28. Total revenue minus explicit costs equal: a. Accounting profit b. Normal profit c. Economic profit d. Both a and b 29. Normal profit is just another way of saying the firm is earning: a. An economic profit b. A zero economic profit c. An accounting profit d. None of the above 30. Which of the following describes the Average-Marginal rule: a. When the marginal magnitude is greater than the average, the average is rising; when the marginal magnitude is...

Economic profit is equal to a. total revenue minus explicit and implicit costs. b. total revenue...

Economic profit is equal to a. total revenue minus explicit and implicit costs. b. total revenue minus explicit costs. c. marginal revenue minus marginal cost. d. total revenue minus implicit costs. e. total revenue minus dividends and interest. If the price elasticity of demand is 4, a 5 percent decrease in price will increase quantity demanded by a. 25% b. 10% c. 8% d. 20% If the calculated elasticity of demand between two points is 2.26, demand is considered a....

Matching Exercise – Costs of Production TERM Implicit Cost Normal Profit Factor substitution Explicit Cost Alternative...

Matching Exercise – Costs of Production TERM Implicit Cost Normal Profit Factor substitution Explicit Cost Alternative cost Decreasing Returns to Scale Envelope Curve MC=MR rule Marginal Cost Economic profit Profit maximization in the short run Total fixed costs Constant costs industry Stage II Production function Shutdown point Variable input Marginal Revenue Sunk Cost Variable Costs DEFINITION a. The area in which every firm will produce. b. Another name for the long run average total cost curve. c. The cost of...

Unit costs are defined as a. Marginal costs b. Total costs c. Average costs d. Implicit...

Unit costs are defined as a. Marginal costs b. Total costs c. Average costs d. Implicit costs e. Inverse costs Group of answer choices 2. In the 1890s, German courts were taking a very different approach to cartels and antitrust. What did the German court rule in the pulp cartel case? a. It ruled the cartel was in monopoly that was illegal b. It ruled that cartels were illegal, but that the wood pulp cartel was not a true cartel...

Explain the difference between explicit costs and implicit costs. - Explicit costs will involve outflow of...

Explain the difference between explicit costs and implicit costs. - Explicit costs will involve outflow of cash due to the use of factors of production is called Explicit Cost. This is also known as Out-of-pocket Costs. This is an actual occurrence to a business. There will be recording and reporting of these costs. The Accounting and Economic Profit will help with calculating of this. EX: Salaries, rent, advertisement,wages, and so on. -Implicit Costs is in which...

Define the following terms: A- portfolio B- Diversification C- Correlation D- Beta

Define implicit and explicit goals. Give an example of each.

1. Define the following terms: a. Complex Compound b. Complex ion c. Ligand d. Differentiate between...

1. Define the following terms: a. Complex Compound b. Complex ion c. Ligand d. Differentiate between a monodentate and a bidentate ligand e. Chelates

In 1 -2 pages, complete the following assignment: Explain the difference between implicit and explicit costs....

In 1 -2 pages, complete the following assignment: Explain the difference between implicit and explicit costs. Give two examples of when an explicit cost is different from an implicit cost. In your own words, explain the difference between accounting and economic profit. Give two examples of when they differ. Finally, explain the difference between economies and diseconomies of scale. Provide examples of when an actual firm might benefit from economies of scale or be harmed by diseconomies of scale.

Subjects