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study guide - 1 Definition of Sunk Cost a costs that cannot...

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1. Definition of Sunk Cost a. costs that cannot be recovered once they have been incurred 2. Definition of Opportunity Cost a. value of next best alternative). 3. Definition of Marginal Cost ( and Marginal Benefit) Marginal Cost – extra cost incurred from producing one extra unit (how much more will it cost to produce 1 more ipod) Marginal Benefit – extra benefit from consuming one extra unit (how much more I would like one extra slice of pizza) 4. Definition of Production Efficiency 5. Remember A bowed out PPF implies that resources are not equally productive in all activities. This was a weird homework question and I would just memorize this. If the question asks you what the PPF looks like, if the question mentions anything about resources not being the same for both types of workers you know it will be bowed out. If they are the same for both workers, then the PPF will be linear. Otherwise you cannot tell. 6.
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This note was uploaded on 09/29/2009 for the course ECON 101 taught by Professor Balaban during the Spring '07 term at UNC.

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study guide - 1 Definition of Sunk Cost a costs that cannot...

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