Unit 3 Flashcards

1
Q

Accounting Costs

A

the explicit or “out of pocket” payments paid by firms to use resources for production process

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2
Q

Economic Costs

A

sum of both implicit costs and explicit costs (out of pocket & opportunity costs)

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3
Q

Accounting Profit

A

total revenue - accounting costs

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4
Q

Economic Profit

A

total revenue - economic costs

(both opportunity costs & out of pocket costs)^

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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

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