[FHCE 3150] - Midterm Exam Guide - Ultimate 10 pages long Study Guide!

• School: University of Georgia
• Department: Financial Planning, Housing and Consumer Economics
• Course: FHCE 3150
• Professor: Patryk Babiarz

Document Summary

Benefit > cost = do it! (cid:894)otherwise don"t(cid:895) Price at which a person would not be indifferent between doing & not doing x. Ignoring implicit (opportunity) costs: failing to ignore sunk costs, measuring costs and benefits as proportions rather than absolute dollar amounts, failure to understand the average-marginal distinction. Value of all that must be sacrificed to do the activity. In other words, the value of the next best alternative forgone due to the decision made. An opportunity cost may not seem to be a relevant cost when in reality it is. On the other hand, sometimes an expenditure may seem relevant when in reality it is not. Sunk costs: costs that are beyond recovery at the moment a decision is made. Measuring costs & benefits as proportions rather than 25309 amounts. Tom manages a small fishing fleet of three boats. Daily cost of operations is , or an average of per boat launched.