ECON 208 Chapter Notes - Chapter 7: Fixed Cost, Diminishing Returns, Variable Cost

• School: McGill University
• Department: Economics
• Course: ECON 208
• Professor: El- Attar Mayssun

Document Summary

Chapter 7: producers in the short run. Financing of firms: basic financial capital used by firms are equity (funds provided by owners) and debt (funds borrowed from creditors outside the firm) Sometimes paid back in form of stocks or shares: profits from this are called dividends. Carry with them oblgation to repay amount borrowed (principal) as well as make additional payment (interest: time when it is paid is the redemption date. Goals of firms: firms assumed to be profit maximizers, firms assumed to be single consistent decision making unit, recent talk about how firms have to be socially responsible (critique that they"re profit is its own service) Production: inputs (materials necessary to production) Inputs that are outputs from another firm (spark plugs) Intermediate products because they"re the output of one and the input of another: going back, these can be traced to the next three sources. Inputs that are provided by nature (land owned)