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What Is the Difference Between Accounting Profits and Economic Profits

question 50

Essay

What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain.


Definitions:

Conditioned Fear

A learned response to a previously neutral stimulus that becomes associated with a fearful event.

Spacing Effect

The phenomenon where learning is more effective when study sessions are spaced out over time rather than crammed in a short period.

Rehearsal

A cognitive process in which information is repeated mentally or out loud to maintain it in short-term memory or to encode it for long-term memory.

Encoding

The method of transforming data into a format that enables its storage in our memory.

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