Charges That Must Be Paid for the Use of Factors

question 220

Multiple Choice

Charges that must be paid for the use of factors of production such as labor and capital, together with estimated depreciation costs, are:

• A) explicit costs.
• B) accounting profits.
• C) implicit costs.
• D) economic profits.

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Definitions:

Profit Made

The revenue remaining after all expenses have been deducted from total sales.

Derivative Action

A lawsuit brought by a corporation's shareholder on behalf of the company against a third party, often for breach of fiduciary duty.

Shareholder

An individual or entity that owns shares in a company, giving them a claim on part of its assets and earnings.

Pre-emptive Rights

Rights that allow existing shareholders to purchase additional shares in a company before new shares are offered to the public, to maintain their proportional ownership.