True or false: costs and profit

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   Economic profit counts implicit costs as well.

2. Statement is true

   No

   Statement

   Accounting profit is never larger than economic profit.

3. Statement is true

   No

   Statement

   Short run and long run costs behave the same way.

4. Statement is true

   Yes

   Statement

   Fixed costs come from the fixed inputs.

5. Statement is true

   No

   Statement

   Implicit costs are unimportant because nothing is paid.

Instructions

Tap True or False for each statement.

Explanation