Question

Please explain whether the following statements are true or false. If the owner of a business pays himself no​ salary, then the accounting cost is​ zero, but the economic cost is positive. This statement is A. true because economic costs include opportunity costs such as expenditures that cannot be recovered. B. false because economic costs include explicit costs. C. false because accounting costs include implicit costs such as the value of the business​ owner's time. D. false because economic costs include the same costs as accounting costs. E. true because economic costs include opportunity costs such as the value of the business​ owner's time.

Answer 1

Answer:

E. true because economic costs include opportunity costs such as the value of the business​ owner's time.

Explanation:

Accounting cost is zero because there is no cost recorded for the salary of the owner.

Economic cost is positive because when the owner devote himself to managing the business, he cannot do something else that can bring him money, for example ex. be employed in someone else's business (opportunity cost)