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econ test 2 - 2 Marginal Revenue(MR = 3 Total Cost(TC =...

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1. Incidence of Taxation a. Tools i. Economic Surplus 1. Deadweight Loss 2. Examples b. Examples i. Who bears the burden of the tax? ii. How is economic surplus affected? 2. Theory of the firm: The Basics a. Firm=an economic institution that transforms factors of production into goods and services b. Assumption c. Profit = Total revenue-Total Cost i. Definitions 1. Total revenue (TR) = Sales X Price
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Unformatted text preview: 2. Marginal Revenue (MR) = 3. Total Cost (TC) = explicit payments to the factors of production plus the opportunity cost of the factors provided by the owners of the firm a. Explicit = actual costs incurred by the firm b. Implicit = includes the opportunity costs of the factors of production c. Marginal Cost (MC) =...
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