If a Firm Traded on the New York Stock Exchange

question 109

Multiple Choice

If a firm traded on the New York Stock Exchange posts an accounting profit of $10 million,then the firm is making a positive economic profit

• A) only if the Securities and Exchange Commission (SEC) approves the accounting report.
• B) only if the firm's opportunity cost is less than $10 million.
• C) only if the firm's opportunity benefit is more than $10 million.
• D) only if the firm's management receives stock compensation.

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Definitions:

Production Possibilities

Various combinations of the amounts of different goods that can be produced within a given economy, given technological constraints and available resources.

Isocost Line

A graph line representing all combinations of a firm's inputs that cost the same total amount.

Expenditures

The financial outflows or payments made by an individual, organization, or government unit, usually for goods or services.

Average Product

The output per unit of input, calculated by dividing total output by the quantity of inputs used.