In What Way Does an Economist's Measurement of Profit Differ

question 15

Multiple Choice

In what way does an economist's measurement of profit differ from an accountant's?

• A) Accountants calculate total revenue differently than do economists.
• B) Accountants do not always include all of the opportunity costs when calculating total production costs.
• C) Economists calculate higher profits for firms as economic profit generally exceeds accounting profit.
• D) Economists do not always include all of the opportunity costs when calculating total production costs.

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Definitions:

Executive Decisions

High-level choices or judgments made by senior management in an organization, often involving strategic directions, policy formulations, and the allocation of significant resources.

Perceptual Errors

are mistakes in judgment that occur when an individual misinterprets sensory stimuli and information from the environment.

Stereotyping

Assigning fixed, generalized attributes to a group of people, often leading to prejudice and discrimination.

Discrimination

Unfair or prejudicial treatment of individuals based on certain characteristics such as race, gender, age, or sexual orientation, rather than on their merits.