Multiple choice

Which of the following statement is false?

  1. Economic costs include the opportunity costs of the resources owned by the firm.

  2. Accounting costs include only explicit costs.

  3. Economic profit will always be less than accounting profit will always be less than accounting profit if resources owned and used by the firm have any opportunity costs.

  4. Accounting profit is equal to total revenue less implicit costs.

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Option D is false because accounting profit = Total Revenue - EXPLICIT costs only, not implicit costs. Implicit costs are excluded from accounting calculations. Options A, B, and C are all true statements about economic costs, accounting costs, and the relationship between economic and accounting profit.

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