What is the term for earnings after all production costs are paid?

Prepare for the SACE Stage 2 Economics exam with a comprehensive quiz. Study through flashcards and multiple-choice questions, each featuring hints and explanations for thorough understanding. Get ready for your exam!

The term for earnings after all production costs have been paid is profit. Profit represents the financial gain that remains when all expenses associated with producing goods or services have been subtracted from total revenue. It is a crucial indicator of a company's financial health and efficiency, reflecting how well it can manage its costs while generating sales.

In a business context, production costs include expenses such as raw materials, labor, utilities, and overhead. Once these costs are deducted from the total sales revenue, the remainder is considered profit, which can be reinvested in the business, distributed to shareholders, or saved for future use.

Other terms in the options represent different concepts: GDP refers to the total monetary value of all finished goods and services produced within a country's borders in a specific time period. Interest refers to the cost of borrowing money or the return on invested capital. Natural resources pertain to materials provided by nature that can be utilized in production. These terms do not accurately describe the concept of earnings remaining after production costs are accounted for.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy