Homework Help: economics

Posted by Kelai on Tuesday, February 13, 2007 at 5:35pm.

Suppose a company has the following costs:
Labor $400
Equipment $300
Materials $100

A)What is the total accounting cost?
B)What is the total economic cost?

In general, accounting costs are the dollars paid for goods and services. In your example $800. Economic costs are expressed in terms of opportunity costs. I dont believe you have provided enough info to determine this. However, economic costs would, likely but not a sure thing, be less than accounting costs.

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