OnRamps Economics College Practice Exam

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $9.99Unlock all
Session length

1 / 20

If total revenue is 200,000, wages are 100,000, and the opportunity cost of the owner's capital is 30,000, calculate the accounting profit.

$100,000

Accounting profit is revenue minus explicit costs. It doesn’t subtract opportunity costs. Here, total revenue is 200,000 and explicit costs (wages) are 100,000, so accounting profit is 200,000 − 100,000 = 100,000. The owner’s capital opportunity cost of 30,000 isn’t included in accounting profit (it would be subtracted when calculating economic profit). If you subtracted it as well, economic profit would be 200,000 − 100,000 − 30,000 = 70,000.

$0

$200,000

$70,000

Next Question
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy