Econ100B Lecture3 - 4-08

Econ100B Lecture3 - 4-08 - Economics 100B Lecture 3 S...

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Economics 100B: Lecture 3 S. Nageeb Ali April 8, 2008
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Economics 100B: April 8, 2008 Handout on Chapter 6 ( ) 1 2 2 2 q L K = +
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Economics 100B: April 8, 2008
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Economics 100B: April 8, 2008
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Economics 100B: April 8, 2008
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Economics 100B: April 8, 2008 Chapter 7 General Outline s Chapter 6 examined efficient production s What a firm cares about is least costly production b Efficiency is one-half of the picture b Other half is picking inputs relative to their cost
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Economics 100B: April 8, 2008 Economic Costs Explicit Costs s Direct out-of-pocket payments for inputs s Wages, Salaries s Cost of capital, depreciation Opportunity Costs s Value of best alternative use of resource s If input is owned, opportunity cost can be measured by price at which input could be sold
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Economics 100B: April 8, 2008 Breakdown of Costs Total Cost = Fixed Cost + Variable Cost Fixed Cost s Cost of inputs whose use does not vary with output level b Price of land, large machinery Variable Cost s Production expense that varies with output b Cost of labor and materials Example : Taxicab service
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This note was uploaded on 07/22/2008 for the course ECON 100B taught by Professor Rauch during the Spring '07 term at UCSD.

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Econ100B Lecture3 - 4-08 - Economics 100B Lecture 3 S...

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