, key concepts
S
H
·
economic/opportunity costs ·
fixed costs
·
explicit costs ·
variable costs
·
implicit costs ·
total costs
S
· normal profit Average fixed cost (AFC)
(Avc
econonomic profit Average variable cost
·
·
total cost (ATC)
Average
·
S
·
economies of scale
·
diseconomies of scale
constant returns to scale
· minimum efficient scale (MESY
costs
Economic ExplicitCosts Crevealed and expressed
Costs
Opportunity costs ·
monetary payments a firm makes to those
who supply- labour services
materials
↳ payments a firm must make or
·
it fuel
must provide to T
·
income
it needs
·
transportation services
attract resources away
from alternative production
opportunities These monetary payments are for
the use of resources owned by others
↳ The measure of economic costs
of any resource used to
These listed
· costs are in
accounting records
produce a
good
is the value/worth the resource
would have in its best alt . use
Implicit CostS (present but not obvious
society combination
when uses a The opportunity cost of
using
of resources to produce a
particular
self-owned self employed resources
product , it
forgoes all alternative ,
opportunities to use those resources Ah
for other
purposes
·
Money payments that self-employed resources
could of earned in their best alt .
uses
scare
productive ·
costs not listed in
accounting records .
↳ costs exist be resources are have alt. uses
S
H
·
economic/opportunity costs ·
fixed costs
·
explicit costs ·
variable costs
·
implicit costs ·
total costs
S
· normal profit Average fixed cost (AFC)
(Avc
econonomic profit Average variable cost
·
·
total cost (ATC)
Average
·
S
·
economies of scale
·
diseconomies of scale
constant returns to scale
· minimum efficient scale (MESY
costs
Economic ExplicitCosts Crevealed and expressed
Costs
Opportunity costs ·
monetary payments a firm makes to those
who supply- labour services
materials
↳ payments a firm must make or
·
it fuel
must provide to T
·
income
it needs
·
transportation services
attract resources away
from alternative production
opportunities These monetary payments are for
the use of resources owned by others
↳ The measure of economic costs
of any resource used to
These listed
· costs are in
accounting records
produce a
good
is the value/worth the resource
would have in its best alt . use
Implicit CostS (present but not obvious
society combination
when uses a The opportunity cost of
using
of resources to produce a
particular
self-owned self employed resources
product , it
forgoes all alternative ,
opportunities to use those resources Ah
for other
purposes
·
Money payments that self-employed resources
could of earned in their best alt .
uses
scare
productive ·
costs not listed in
accounting records .
↳ costs exist be resources are have alt. uses
