Unit 3 Flashcards
1
Q
Accounting Costs
A
the explicit or “out of pocket” payments paid by firms to use resources for production process
2
Q
Economic Costs
A
sum of both implicit costs and explicit costs (out of pocket & opportunity costs)
3
Q
Accounting Profit
A
total revenue - accounting costs
4
Q
Economic Profit
A
total revenue - economic costs
(both opportunity costs & out of pocket costs)^
5
Q
Fixed Cost
A
the costs of fixed resources which do not change with the output produced
(e.g. rent doesn’t increase the more products you produce0