ECON 103 Lecture Notes - Lecture 13: Christina Romer, Opportunity Cost, Marginal Utility
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In this lecture we introduce the underlying incentives behind the decision making process of buyers and sellers: saplingplus assignments are due next tuesday, this thursday (october 18th) at 6pm i(cid:374) the (cid:272)a(cid:373)pus (cid:272)e(cid:374)ter auditoriu(cid:373) the (cid:858)philip ga(cid:373)(cid:271)le. Christi(cid:374)a o(cid:373)er (cid:449)ill (cid:271)e speaki(cid:374)g at this le(cid:272)ture. Decisions based on concepts of costs and benefits (chapter 9) Implicit costs: explicit costs are those that come out of the pocket, that is they can be measured in dollar amounts. These costs are the actual expenditures of the firm. They are also known as full opportunity costs. However, it shows a more complete picture of costs. Economic profit is what a business actually bases their decision on and it is also the measure that economists prefer. Zero profits: when you are earning just enough to cover your costs, including the opportunity cost of all resources at hand.
