ECO 182 Study Guide - Opportunity Cost, W. M. Keck Observatory, European Cooperation In Science And Technology

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Chapter 10: firms, an institution that hires factors of production and organizes those factors to produce and sell goods, its goal is to maximize profits, accounting profit. Measured to ensure that the firm pays the correct amount of tax and to show investors how their funds are being used. Profit = total revenue total cost: economic accounting. Predict firms decisions and the goals of these decisions is to maximize economic profit. Econimic profit= total revenue- total cost: total cost is measured as opportunity cost of production and the sum of implicit and explicit costs, opportunity cost of production. Best value alternative use of the resources that a firm uses in production. Economic depreciation: fall in market value of a firms capital over a given period, =market price at the beginning of the period - market price at the end of the period. Forgone interest: return on funds used to acquire capital, resources supplied by the firm"s owner, entrepreneurship.

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