Erin Has a Theory That the Largest Cause of Poverty

question 100

Multiple Choice

Erin has a theory that the largest cause of poverty is poor budgeting and financial planning.Her suggestion to provide budgeting and planning advice to the poor is similar to the reasoning behind

• A) the winner-take-all theory.
• B) in-kind transfers.
• C) efficiency wage theory.
• D) occupational crowding.
• E) compensating differentials.

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Definitions:

Opportunity Costs

The cost of forgoing the next best alternative when making a decision or choice.

Implicit Costs

Indirect, non-out-of-pocket expenses which represent the opportunity costs of using resources owned by the firm for its operations.

Accounting Profit

The difference between total revenue and explicit costs.

Economic Profit

The difference between total revenue and total costs, including explicit and implicit costs.