Which of the Following Statements Is Correct

question 42

Multiple Choice

Which of the following statements is correct?

• A)Assuming that explicit costs are positive, economic profit is greater than accounting profit.
• B)Assuming that implicit costs are positive, accounting profit is greater than economic profit.
• C)Assuming that explicit costs are positive, accounting profit is equal to economic profit.
• D)Assuming that implicit costs are positive, economic profit is positive.

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Definitions:

Total Income

The sum of all earnings and revenues received by an individual or business, including wages, salaries, investment income, and revenue from sales or services.

Total Taxes

The aggregate amount of taxes paid by an individual, corporation, or other entity to governmental authorities within a specified period.

Payroll Tax

Taxes imposed on employers and/or employees, usually calculated as a percentage of the salaries that employers pay their staff.

Capital Intensive Techniques

Production processes that require a high investment in capital assets relative to labor.