Francis wants to buy some paintings for their store to make it feel more classy. Francis would need to take $20,000 out of their savings account (which earns 1% interest a year) in order to finance the paint-ings. At the end of the year, Francis knows they could sell the paintings for $20,000 but they would choose not to. When calculating this year's economic profit, Francis would count this as a:

When calculating this year's economic profit, Francis would count this as a:

cost.

Explanation:

Francis would include the opportunity cost of $20,000, which the paintings could have fetched, as part of the costs.  The cost will also include the lost 1% interest or $200 a year.  This means that, among other costs, the total cost includes $20,200.  This is one distinguishing factor between economic profit and accounting profit.  Economic profit includes lost opportunity revenues for alternative uses of the resource as costs unlike accounting profit.

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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