Businesses Employ Resources to Use in the Production and Sale

question 138

Essay

Businesses employ resources to use in the production and sale of a good or service.Accounting profit is typically used as a way of evaluating the success of a business, but economists argue that economic profit is more relevant to determining whether a business should continue to operate.What is the difference between these two measures of profit? Explain why accounting profit is usually greater than economic profit.

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Definitions:

Import-Licensing Requirement

Regulations requiring a company or individual to obtain permission, often through a specific license, before importing goods into a country, used by governments to control the volume and types of goods entering the market.

Nontariff Barriers

All barriers other than protective tariffs that nations erect to impede international trade, including import quotas, licensing requirements, unreasonable product-quality standards, unnecessary bureaucratic detail in customs procedures, and so on.

Import Restrictions

Government-imposed controls or limitations on the quantity or value of goods that can be imported into a country, often to protect domestic industries.

Import Demand

The quantity of goods or services that domestic consumers or firms are willing to purchase from abroad at various prices.