Term
|
Definition
| Involves actually laying out money. (materials, physical price) |
|
|
Term
|
Definition
| Does not involve laying out money. (Measured in Dollar Terms) (Opportunity Cost) |
|
|
Term
| Explicit Cost (For making a chair) |
|
Definition
| Price of materials (wood, nails, glue). Cost of labor. |
|
|
Term
| Implicit Costs (For making a chair) |
|
Definition
| What's your Opportunity Cost? What's the next best thing you could've been doing? |
|
|
Term
| Total Opportunity Costs = |
|
Definition
| Explicit Cost + Implicit Costs |
|
|
Term
|
Definition
| Total Revenue - Explicit Cost |
|
|
Term
|
Definition
| Total Revenue - Explicit Costs- Implicit Costs |
|
|
Term
|
Definition
| Cost of producing one more unit. |
|
|
Term
Product X = 100 Total Cost = $10
Product 2X = 101 Total Cost = $11
Marginal Analysis Between X and 2X = |
|
Definition
|
|
Term
|
Definition
| A cost that is incurred and non recoverable.(Remember JT Concert example) (Does not factor into your OC) |
|
|
Term
|
Definition
| $ X (1/((1+r)^t) = Real Value |
|
|
Term
| In a Discrete Setting (Only buy whole Units) |
|
Definition
| Marginal Benefit has to be greater than or equal to Marginal Cost |
|
|
Term
|
Definition
| Marginal Benefit = Marginal Cost |
|
|
Term
|
Definition
| Marginal Benefit - Marginal Cost |
|
|
Term
|
Definition
| All Marginal Net Benefits Added up. |
|
|
Term
| Properties of all Indifference curves |
|
Definition
Never Cross.
Farther out from origin indicates higher utility.
Downward sloping
Convex |
|
|
Term
|
Definition
| - (MUa)/(MUb) = - (Pa)/(Pb) |
|
|
Term
| Cannot Tell the price with indifference curves they will try to trick you by... |
|
Definition
| giving you a straight indifference curve. |
|
|
Term
|
Definition
| relationship between quantity of inputs and quantity of outputs. |
|
|
Term
|
Definition
| an input whose quantity doesn't change with quantity of output. |
|
|
Term
|
Definition
| an input that changes with the number of outputs. |
|
|
Term
|
Definition
| time period in which all inputs are variable. |
|
|
Term
|
Definition
| time period in which some inputs are variable whilst others are fixed. |
|
|
Term
|
Definition
| Additional quantity of output produced by using one more unit of that input. |
|
|
Term
| Optimal Point is where... |
|
Definition
| Marginal Revenue = Marginal Cost |
|
|
Term
| 4 Things for Perfect Competition to Occur |
|
Definition
1: Many (Infinite) Buyers and Sellers
2: All firms are price takers (Can't set their own price)
3: homogenous products
4: Free entry and exit into industry |
|
|
