Chapter 13 Knowledge Building.docx

Chapter 13 Knowledge Building.docx - Chapter 13 Knowledge...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 13 Knowledge Building Questions: 1. What is the formula to calculate profits? Profit formula = Total revenue –Total cost 2. Define Explicit and Implicit Costs. Explicit costs are expenses that require payment to be made, which lessens the amount of money your business has in the bank (ex. Rent, payroll, etc.) Implicit costs are implied costs where you don’t pay in cash and it’s not recorded in the company’s books. 3. Define Economic Profit and Accounting Profit. Economic profit is the total amount of revenue minus total cost (this includes both explicit and implicit profits). Accounting profit is total revenue minus total explicit cost. 4. Define Production Function, Marginal Product, and Diminishing Marginal Product. Production function is a graph or equation that shows the relationship between the physical inputs or outputs of a business. Marginal product is the output that results from an additional unit of a factor of production such as a machine or labor hour, when all the other factors stay the same. Diminishing Marginal product is
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern