Ch 9 Micro-JTCC

Front

Economic cost can best be defined as

Back

a payment that must be made to obtain and retain the services of a resource.

Front

Maria’s Mexican Cantina is a restaurant that has been around for 30 years. In that time they have remained in the same building and only changed inputs such as staff and the menu. Based on this, we can conclude that Maria’s

Back

has operated in the long run, even though it chose to keep the building input fixed.

Front

Production costs to an economist

Back

reflect opportunity costs.

Front

Accounting profits equal total revenue minus

Back

total explicit costs.

Front

Which of the following definitions is correct?
Options:
Accounting profit + economic profit = normal profit.
Economic profit − accounting profit = explicit costs.
Economic profit = accounting profit − implicit costs.
Economic profit − implicit costs = accounting profits.

Back

Economic profit = accounting profit − implicit costs.

Front

An explicit cost is

Back

a money payment made for resources not owned by the firm itself.

Front

To the economist, total cost includes

Back

explicit and implicit costs.

Front

The basic characteristic of the short run is that

Back

the firm does not have sufficient time to change the size of its plant.