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Econ Test 1 - 3.8.11

Econ Test 1 - 3.8.11 - Decrease Managerial Economics SD i...

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king a change, only move one curve. Demand or Supply. Decrease Quantity D o Increase S o Decrease+ .302 Increase Price Managerial Economics Test #1 March 8, 2011 Variable Costs o Costs always considered as relevant in decision making Extent Decision o Aka marginal analysis. How much decision. o A business manager is trying to decide how many workers to lay off in order to decrease costs o Opposite is known as investment decisions Accounting Costs vs. Economic Costs o Main difference is Economic Costs include Opportunity Costs o Economic Costs > Accounting Costs (Always Greater) If a firm shuts down and produces zero output in the short run o Variable costs = zero o Losses will be incurred (losses equal to fixed costs normally incurred) o Avoidable costs = zero Rational Decisionmaker o Marginal Analysis. Only takes action of marginal benefit exceeds marginal cost of certain action Economic Function of a government in a market economy o Enforce Property Rights Economies of Scale
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Econ Test 1 - 3.8.11 - Decrease Managerial Economics SD i...

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