What Is the Difference Between Accounting Profit and Economic Profit

question 149

Multiple Choice

What is the difference between accounting profit and economic profit?

• A) They are the same thing.
• B) They are only different if the accountant makes a mistake.
• C) Accounting profit is usually smaller than economic profits.
• D) Accounting profit makes no allowance for several implicit costs, including equity capital, while economic profit takes these costs into account.

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Definitions:

Temporal Lobe

A region of the cerebral cortex responsible for processing auditory information and is involved in memory and speech.

Feature Detectors

Neurons in the brain that identify specific features of a stimulus, such as shape, angle, or movement.

Bipolar Cells

Neurons in the retina that transmit signals from the photoreceptors to the ganglion cells.

Blindsight

A phenomenon in which people who are perceptually blind in certain areas of their visual field demonstrate some response to visual stimuli without consciously perceiving them.