Suppose That the Implicit Cost for a Business Was $1,000

question 250

Multiple Choice

Suppose that the implicit cost for a business was $1,000 and the explicit cost was $5,000 and that the firm sold 1,000 units of its products at $6 per item. We can conclude that the firm's

• A) accounting profit was $6,000, and its economic profit was $0.
• B) accounting and economic profits were both $0.
• C) accounting profit was $1,000, and economic profit cannot be determined.
• D) accounting profit was $1,000, and economic profit was $0.

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Definitions:

Correlational Method

Research in which two or more variables are measured and compared to determine to what extent, if any, they are associated.

Quasi-Experimental Design

A research strategy that attempts to estimate the causal impact of an intervention without random assignment to treatment or control groups.

Experimental Method

A study in which a researcher manipulates a variable, referred to as the independent variable, measures possible effects on another variable, referred to as the dependent variable, and tries to hold all other variables constant.

Stereotype Threat

A situational predicament in which people are or feel themselves to be at risk of conforming to stereotypes about their social group.