MGEB02H3 Chapter : Week 9 chapter notes

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lavenderdonkey6

5 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEB02H3

Professor

A.Mazaheri

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Document Summary

Chapter 7 the cost of production notes accounting cost actual expenses plus depreciation charges for capital equipment economic cost cost to a firm of utilizing economic resources in production, including opportunity cost. N when estimating future probability of business, economists and managers are concerned with capital cost of plant and machinery. N this cost involves not only monetary outlay for buying and running the machinery, but also the cost associated with wear and tear. N marginal cost (mc) increase in cost resulting from the production of one extra unit of output; mc = vc / q = tc / q. N user cost of capital = economic depreciation + (interest rate) (value of capital) N user cost of capital annual cost of owning and using a capital asset, equal to economic depreciation plus forgone interest r = depreciation rate + interest rate. Mrts = k / l = mpl / mpk.

Related Questions

The difference between zero accounting profit and zero economic profit is that:

(a) economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero accounting profit.

(b) economists do not include opportunity cost in zero economic profit, while accountants do include opportunity cost in zero accounting profit.

(c) economists include opportunity cost in zero accounting profit, while accountants do not include opportunity cost in zero economic profit.

(d) economists do not include opportunity cost in zero accounting profit, while accountants do include opportunity cost in zero economic profit.

yelloweagle292

Economic costs of production differ from accounting costs in that:

A) economic costs include expenditures for hired resources while accounting costs do not.
B) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not.
C) accounting costs include expenditures for hired resources while economic costs do not.
D) accounting costs are always larger than economic cost.

turquoisesalmon794

Economic costs of production differ from accounting costs in that
A) economic costs include expenditures for hired resources while accounting costs do not.
B) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not.
C) accounting costs include expenditures for hired resources while economic costs do not.
D) accounting costs are always larger than economic cost.

tealrhinoceros624

MGEB02H3 Chapter : Week 9 chapter notes

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