ECON-101 Lecture Notes - Lecture 14: Opportunity Cost
Document Summary
Consumption possibilities: all the things that a consumer can afford. Utility: the benefit or satisfaction from consuming a good or a service. Marginal utility(mu): the change in total utility that results from a unit increase in the quantity of the good consumed. Total utility(tu): the total benefit a person gets from the consumption of goods(more consumption, more utility) Mu: as quantity consumed is going up, mu decreases. Principle of diminishing mu: is the decrease in mu as the quantity of the good consumed increases. These are all the opportunity cost of attending college. This is the money you pay, that is documented for. If you calculate a firms costs that have documentation, those are accounting costs. If you take into account all other losses, you calculate the opportunity cost concept. If you calculate using opportunity costs in your total cost, you find the economic profits. If you calculate using only documentable costs as total costs, it becomes accounting profits.
