Chapter 4 Flashcards
What is business?
A business is an enterprise that brings individual’s, financial resources, and ecoomic resources together to produce a good or service for economic gain.
What is production?
Production is the process of transforming a set of resources into a good or a service that has eocnomic value.
What are inputs?
Inputs are the resources used in production.
What are outputs?
Outputs are the quantity of a good or service that results from production.
What is a labour-intenstive process?
A labour-intensitive process is a production process that employs more labour and less captial.
What is a captial-intensitive process?
A captial-intensive process is a production process that employs more captial and less labor.
What is productive efficiency?
Productive efficiency is making a given quantitiy of output at the lowest cost.
What are explicit costs?
Explicit costs are payments made by a business to businesses or people outside of it.
What are implicit costs?
Implicit costs are the owner’s opportunity costs of being involved with a business.
What are normal profits?
Normal profits are the miniumn return nesscary for owners to keep funds and their entrepreturial skills in their businesses.
What is economic costs?
Economic costs are a business’s total explict and implict costs.
What is accounting profit?
Accounting profit is the excess of a business’s total revenue over its explicit costs.
What is economic profit?
Economic profit is the excess of a business’s total revenue over its economic costs.
What are fixed inputs?
Fixed inputs are inputs whose quanitites cannot be adjusted in the short run.
What are variable inputs?
Variable inputs are inputs who quanitities can be adjustfed in the short run.
