Accountants Consider Only Explicit Costs When Measuring Profit,whereas Economics Consider

question 34

Multiple Choice

Accountants consider only explicit costs when measuring profit,whereas economics consider both implicit and explicit costs.The reason that they ignore implicit costs is that:

• A) implicit costs are typically very small.
• B) explicit costs are always greater than implicit costs.
• C) implicit costs are not out-of-pocket expenses.
• D) implicit costs are tax deductible.
• E) implicit costs cannot be measured in terms of dollars.

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Definitions:

Nonautocorrelated Random Error

Errors in a dataset that occur randomly and are not correlated with each other, indicating no predictable pattern in the fluctuations.

Autoregressive Model

An Autoregressive Model is a statistical model for analyzing and forecasting time series data, where future values are assumed to be a linear function of past values.

Exponential Smoothing Model

A forecasting technique that applies decreasing weights to past data, with the most recent data weighted most heavily.

Mean Absolute Deviation

A measure of variability that quantifies the average of the absolute deviations of each data point from the data set's mean.