the production process quiz 2 Flashcards
total revenue
the amount a firm receives for the sale of its output
total costs
the market value of the inputs a firm uses in production
profit
total rev minus total costs
opportunity costs
the forgone benefit that would have been derived from an option not chosen. (implicit & explicit)
(lose the opportunity to benefit from an option because of the decisions we make)
explicit costs
input costs that require outlay of money by the firm. (ex: paying wages to workers)
implicit costs
input costs that do not require an outlay of money by the firm.
(losing money for the decisions you make)
opportunity costs vs implicit costs
opportunity costs: decisions that you make between any 2 things.
implicit costs: decisions that make you lose the opportunity to make money.
