Term
| Types of Cost Associated wtih the Production Process |
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Definition
- Explicit Cost/ Total Costs
- Implicit Cost/ Opportunity Costs
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Term
| Explicit Cost/ Total Costs |
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Definition
Costs incurred when monetary payments are made for the purchase of an economic resource to be used for production. |
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Term
| Implicit Cost/ Opportunity Costs |
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Definition
The value of an economic resource used for production...but no monetary payment is made for its use. (Example: Anything over 40hrs is considered implicit.) |
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Term
| Types of Profit Associated with the Prodsuction Process |
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Definition
- Accounting Profit
- Economic Profit
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Term
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Definition
The difference between the total revenue generated from the sale of a commodity and the explicit/total cost of production. Accounting Profit (Pa) = TR - TC
TR = PQ |
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