Why are costs important in economics?
Why don’t economists use the same cost data as accountants use?
What is the real cost of putting an unemployed laborer to work raking leaves or digging holes and refilling them during a severe recession? Explain.
How do firms incorporate opportunity costs to calculate economic costs? Discuss and give example using an explicit economic cost and an implicit economic cost.
Why is it important to distinguish between explicit and implicit costs?
Your firm has total sales revenue of $1,000,000 and total explicit costs of $600,000 and total implicit cost of $300,000. What will be the accounting profit for the firm? What will be the economic profit for the firm? Explain the difference using the data.
Why must normal profits be counted as a cost, according to economists?
Evaluate this statement: “If the economic profit is zero, a business will shut down.”