If Your Business Earns $20,000 in Revenues, Has Explicit Costs

question 18

Multiple Choice

If your business earns $20,000 in revenues, has explicit costs of $7,000, and implicit costs of $5,000, your accounting profit is

• A) $32,000.
• B) -$8,000.
• C) $8,000.
• D) $13,000.

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Definitions:

Trade Agreements

Formal accords between countries or regions to reduce barriers to trade, such as tariffs and import quotas, and encourage economic cooperation.

United Nations

An international organization founded in 1945 aimed at promoting peace, security, and cooperation among countries.

Import Tariff

A tax imposed by a government on goods and services imported from other countries, used to control trade.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium in a market is not achieved or is not achievable.