05 Costs Supply

05 Costs Supply - Costsofproduction Quiz: 1....

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    Costs of production Quiz:  1. Define Marginal Cost 2. What’s the usual shape of the average cost  curve? 3. What product is used as an example in Ch. 4  (supply and demand)? 4. What product is discussed in the Hamermesh  example for today, set in ancient Rome. 
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    Costs of production  Costs are important b/c they are important to  firms We will see that profit maximization is similar to  utility maximization Firms’ costs lead to upward sloping supply Consumers’ costs led to downward sloping  demand.
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    Types of Costs  Economic Profit versus Accounting Profit Opportunity costs/the owner’s salary Opportunity costs/the owner’s salary More on this later More on this later Fixed v. Variable Fixed v. Variable Fixed v. Sunk Fixed v. Sunk Marginal, Average Marginal, Average (see worksheet) (see worksheet)
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    Some useful formulas Total costs TC = FC + VC Average costs AC = AFC + AVC
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This note was uploaded on 04/26/2010 for the course ECON 101 taught by Professor Staff during the Spring '08 term at Vassar.

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05 Costs Supply - Costsofproduction Quiz: 1....

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