ECON 1011 Lecture Notes - Lecture 10: Opportunity Cost, Fixed Cost, Variable Cost
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Document Summary
Require capital (machinery, equipment, inputs into the production process) Natural resources used to produce a physical product. Profit- owners are always trying to increase their profit. Refers to the amount of extra money they bring in, goes to the owners of a firm. Owners might be an individual, a collection of individuals, or a stockholder/shareholder. Total profit = total revenue - total cost. Costs of workers, taxes to the government, rental space costs, electric bills. These are what accountants are constantly keeping track of. Not so obvious/corresponding to a payment that has to be made on a monthly basis. Opportunity cost: what the individual owners of the firm might do instead of what they"re doing now. Opportunity cost- two different ways to define: value (measured in $ or utils, etc. ) of the next best opportunity. Usually associated with implicit costs: value (measured in $ or utils etc. ) of all that must be foregone, or given up.
