In general, (1)opportunity cost is greater than accounting cost.
(2)opportunity cost is less than accounting cost.
(3)economic profit is greater than accounting profit.
(4)economic profit is less than accounting profit.
A)1 only
B)1 and 3
C)1 and 4
D)2 and 3
E)2 and 4

Question

Quizplus · Accepted Answer

Opportunity cost refers to the cost of foregone alternatives, which is not included in accounting cost. Therefore, opportunity cost is generally greater than accounting cost. Economic profit takes into account opportunity cost, while accounting profit only considers explicit costs. Therefore, economic profit is generally less than accounting profit.

In General, (1)opportunity Cost Is Greater Than Accounting Cost