3. Cost of Production 1
a. Explain the difference between explicit costs and implicit costs and who would care about these terms and why.
b. From the point of view of a firm, how would you explain the difference between the short run and long run, and their impact on the decision-making of the firm?
i. How do you tell short run from long run and how will those distinctions impact the decision-making of the firm?
c. Your boss asks you to document your companiesâ production function. How would you do that? What information would you need? Where would you get that info? Be specific.
i. What does the production function consist of?
ii. What does it tell us?
iii. How would you approach defining your company production function?
d. List and explain the Short Run Production Relationships
3. Cost of Production 1
a. Explain the difference between explicit costs and implicit costs and who would care about these terms and why.
b. From the point of view of a firm, how would you explain the difference between the short run and long run, and their impact on the decision-making of the firm?
i. How do you tell short run from long run and how will those distinctions impact the decision-making of the firm?
c. Your boss asks you to document your companiesâ production function. How would you do that? What information would you need? Where would you get that info? Be specific.
i. What does the production function consist of?
ii. What does it tell us?
iii. How would you approach defining your company production function?
d. List and explain the Short Run Production Relationships
