This is for a microeconomics class
Suppose a company incurs the following costs: labor, $600; equipment, $300; and materials, $200. The company owns the building, so it doesn't have to pay the usual $900 in rent.
- What is the total accounting cost?
- What is the total economic cost?
- If the company sold the building and then leased it back, what would be the change in
a) Accounting costs?
b) Economic costs?