Marginal Analysis-- Chapter 7 notes

Marginal Analysis-- Chapter 7 notes - Marginal...

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

View Full Document Right Arrow Icon
Marginal Analysis—Chapter 7 Notes - Explicit Cost: is a cost that requires an outlay of money. i.e. “the explicit cost of the additional year of schooling includes tuition.” - Implicit Cost: does not involve an outlay of money instead, it is measured by the value, in dollar terms, of all the benefits that are forgone. i.e. “the implicit cost of the year spent in school includes the income you would have earned if you had taken that job instead.” - Accounting Profit: The Businesses’ revenue minus the explicit cost and depreciation. - Economic Profit: The business’s revenue minus the opportunity costs of its resources. It is usually less than the accounting profit. - Capital: the value of its assets—equipment, buildings, tools, inventory, and financial assets - Implicit cost of Capital: the opportunity cost of the capital used by a business it reflects the income that could have been realized if capital had been used in its next best alternative way. -
Background image of page 1

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

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

Page1 / 2

Marginal Analysis-- Chapter 7 notes - Marginal...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online