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?