From the firm's perspective, is an accounting profit of zero a ...

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From the firm's perspective, is an accounting profit of zero a good result, a bad result, or merely a satisfactory result? Why? Is an economic profit of zero a good result, a bad result, or merely a satisfactory result? Why?

Question 2

The category of resources economists call land refers to all of the following, except:
 a. natural gas.
  b. animals.
  c. oceans.
  d. minerals.
  e. buildings.

[janeli1]

Answer to Question 1

An accounting profit of zero is most likely a bad result because the firm generated only enough revenues to cover explicit cost meaning that there was no compensation for the time, investment or other opportunity costs associated with the operations. In contrast, an economic profit of zero indicates a satisfactory result because total revenues were sufficient not only to cover all explicit costs but also to provide a fair rate of return on the time, money, and other opportunity costs associated with operating this firm.

Answer to Question 2

e

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Gracias!

[Alyson.hiatt@yahoo.com]

Thanks for the timely response, appreciate it