Suppose a company incurs the following costs labor 600


This is for a microeconomics class

Suppose a company incurs the following costs: labor, $600; equipment, $300; and materials, $200.  The company owns the building, so it doesn't have to pay the usual $900 in rent.

  • What is the total accounting cost?
  • What is the total economic cost?
  • If the company sold the building and then leased it back, what would be the change in 

a) Accounting costs?

b) Economic costs?

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Business Economics: Suppose a company incurs the following costs labor 600
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