The Accompanying Table Outlines the Explicit and Implicit Costs Incurred

question 37

Essay

The accompanying table outlines the explicit and implicit costs incurred by a small graphic design company in France that takes in annual revenues equal to $250,000.

a.What would this company's accounting profits equal for a year?
b.What would this company's economic profits equal for a year?
c.What would we expect to happen in the long run for this market? Why?

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Definitions:

Bilateral Trade Agreement

An agreement between two countries that lowers tariffs and trade barriers on most goods and services traded between them.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to a country's economy by bringing in revenues.

Mercantilism

An economic theory and practice dominant in Europe from the 16th to the 18th century, focusing on accumulating wealth through trade and having a positive balance of trade.

Higher Rates

Increased levels of a particular measure, often referring to interest, inflation, or pricing rates compared to a standard or previous period.