Figure 6-1 -In Figure 6-1,a Movement from Point a to Point B

question 13

Multiple Choice

Figure 6-1
-In Figure 6-1,a movement from point A to point B can be explained by

• A)an increase in spending due to a war.
• B)an increase in the price level.
• C)an increase in the demand for manufacturing goods due to new technology.
• D)a drop in the price level.

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Definitions:

Accounting Profit

The difference between a firm's total revenue and its explicit costs, often reported in the financial statements.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the true profitability of a company.

Accounting Profit

The difference between the total revenue received from sales and the total explicit costs of a business.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.