The annual cost of producing the entire output of final goods and services in an economy is
A) equal to the quantity of total output produced.
B) greater than the total income of households in the economy.
C) equal to total income.
D) equal to the total income of households in the economy only if profits are zero.

Question

Quizplus · Accepted Answer

The annual cost of producing the entire output of final goods and services in an economy is equal to the total income generated by the production, including wages, profits, and other payments to factors of production. Therefore, the total cost of production is equal to the total income generated, making choice C the correct answer.

The Annual Cost of Producing the Entire Output of Final