Cost (Chunk 1)

Question 1

Accounting costs

Answer 1

Are the explicit monetary cost of production
eg. wages, rent, raw mateirals

Question 2

Economic Costs

Answer 2

Are accounting costs plus the opportunity costs of being in a businesss (implicit costs).
Eg.
- intrest that could be earned on the money invested
- salary that the own couled earn elsewhere
- rent that could be eary for the facotry space

Question 3

Opportunity costs

Answer 3

The next best alternative forgone of a decsion.

Question 4

Law of Supply

Answer 4

As the price of a good increases quanity supplied decreases, vice versa, ceteris paribus.