question
explicit cost
answer
a cost that requires an outlay of money
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implicit cost
answer
an opportunity cost that does not require an outlay of money, but instead is measured in the value of benefits that are foregone
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accounting profit
answer
the total revenue minus the explicit cost and depreciation
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economic profit
answer
the business's total revenue minus the opportunity cost of its resources; also includes the explicit costs
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implicit cost of capital
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the opportunity cost of the capital used by a business, ie. the income the owner could have realized from that capital if it had been used in the next best alternative way
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loss
answer
earning of negative economic profit results in a _______.
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positive
answer
___________ economic profit indicates that the current use is the best use of resources
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negative
answer
___________ economic profit indicates that there is a better alternative use for resources
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normal profit
answer
an economic profit equal to zero indicates that a firm is earning economic profit just high enough to keep it engaged in its current activity
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