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Related Flashcards
Related Topics
Cards In This Set
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The market value of the inputs a firm uses in production
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Total Cost
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Total revenue minus total cost
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Profit
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The amount a firm receives for the sale of its output.
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Total Revenue
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Input costs that require an outlay of money by the firm
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Explicit costs
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Input costs that do not require an outlay of money by the firm
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Implicit costs
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Total revenue minus total cost, including both explicit and implicit costs
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Economic profit
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Total revenue minus explicit cost
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Accounting profit
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Economists normally assume that people start their own businesses to help society maximize its income.
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False, maximize profit
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When economists speak of a firm's costs, they are usually excluding the opportunity costs.
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False, usually including
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Implicit costs are costs that do not require an outlay of money by the firm.
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True
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Accountants keep track of the money that flows into and out of firms.
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True
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Accountants often ignore implicit costs
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True
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The relationship between quantity of inputs used to make a good and the quantity of output of that good.
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Production function
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The increase in output that arises from an additional unit of input.
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Marginal product
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The property whereby the marginal product of an input declines as the quantity of the input increses
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Diminishing of the input increases
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