Uncertainty Means That a Decision Has Clear-Cut Goals, and That

question 126

True/False

Uncertainty means that a decision has clear-cut goals, and that good information is available, but the future outcomes associated with each alternative are subject to chance.

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its own use rather than selling those resources.

Explicit Costs

Direct, out-of-pocket payments for resources employed by firms for production, such as wages or rent.

Accounting Profit

The net income a company reports on the financial statements, calculated by subtracting total expenses from total revenues.

Economic Profit

The variance between what a business earns in total and what it spends, counting both actual expenses and notional costs.