What is difference between economic and accounting profits

Assignment Help Business Economics

Reference no: EM131003333

Explain how it can be that something that an accountant calls a profit is actually a cost from the economist’s point of view. What is the difference between economic and accounting profits?

Reference no: EM131003333

Questions Cloud

How many months will it take to pay for the building : A building is priced at $125,000. If a down payment of $25,000 is made and a payment of $1,200 every month thereafter is required, how many months will it take to pay for the building? Interest is charged at a rate of 9% compounded monthly.

What are the components that might be included : What are the components that might be included in the calculation of net pension cost recognized for a period by an employer sponsoring a defined benefit pension plan?

Explain what is meant by the idea of optimum-size firm : Explain what is meant by the idea of an “optimum-size firm.” What forces would make firms in one industry on average larger than firms in another industry (e.g. grocery stores are generally much larger than beauty parlors)?

Explain the typical shape of the long-run average cost curve : In the long-run, a firm’s cost of production are shown by the long-run average cost curve. What forces explain the typical shape of the long-run average cost curve? How are the law of diminishing returns and diseconomies of scale different?

What is difference between economic and accounting profits : Explain how it can be that something that an accountant calls a profit is actually a cost from the economist’s point of view. What is the difference between economic and accounting profits?

How is the return included in the calculation : The return on plan assets is the increase in plan assets (at fair value), adjusted for contributions to the plan and benefits paid during the period. How is the return included in the calculation of the periodic pension expense?

Find amount of consumer surplus for a linear demand : Find the amount of consumer surplus(CS) for a linear demand P = 20 - 2x, when (i) P = 0 and (ii) P =10 What is the maximum and the minimum amount of CS a consumer can have for this demand and at what prices?

The consumption bundle to maximize the utility level : U(X,Y)=X.6Y .4 , MUX=.6X -.4Y .4 MUY=.4X .6Y -.6 PX=3 PY=4 I=60 (a) Calculate the MRSX,Y. (b) Write the budget constraint. (c) What is the consumption bundle to maximize the utility level? What is the maximum utility level?

What is the consumption bundle to maximize the utility level : Good X and good Y are complements. U(X, Y) = min (5X, 4Y). Price of X is $5 and price of Y is $4. The total income is $80. (a) Write the consumption ratio of good X and good Y. (b) Write the budget constraint. (c) What is the consumption bundle to ma..

User Account

All Pages