(H2E_Micro) Firms and Decisions Flashcards
1
Q
What is a firm?
A
Unit of decision making which combines FOP to produce a good or service (either SMEs or MNCs)
2
Q
What is a plant?
A
Firm’s production unit
3
Q
what is an industry?
A
made up of all firms producing the same products/groups of firms in a particular field
4
Q
what is an explicit cost?
A
costs that take the form of actual cash payments, like wages/interest on borrowed capital/rent
5
Q
what is an implicit cost?
A
opportunity costs of using the firm’s own resources (e.g: the cost of a firm focusing too much on the advertising over the RnD
6
Q
A
