The Opportunity Cost of Production Differs from an Accounting Definition

question 40

Multiple Choice

The opportunity cost of production differs from an accounting definition of a firm's costs because it includes

• A) expenditures the firm undertakes for research and development.
• B) the opportunity cost of assets and financial resources owned by the firm.
• C) the direct monetary cost of purchasing resources.
• D) the firm's revenue as a cost.

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Definitions:

Average Cost

The total cost of production divided by the number of goods produced, providing a cost per unit of output.

Marginal Revenue

The incremental revenue resulted from the sale of one more product or service unit.

Total Revenue

The entire amount of income generated by the sale of goods or services.

Color Printer

A device for printing documents and images in color, using a combination of ink or toner.