ECON 1000 Chapter Notes -Production Function, Variable Cost, Fixed Cost

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: George Georgopoulos

Document Summary

Firm is an institution that hires factors of production and organizes them to make and sell goods. Depreciation fall in value of a firm"s capital. A firm measures its finances to make sure it pays the correct amount of taxes and show investors how they are doing. Economic profit total revenue total cost (opportunity cost of production) Opportunity cost of production value of the best alternative use of the resources a firm uses (expressed in 23897) If resources are bought in the market, the opportunity cost of production is the amount spent on it. If the firm owns resources, the opportunity cost is measured because the unit could be sold and the capital could be rented from another firm. This is called implicit rental rate of capital. Economic depreciation fall in the market value of a firm"s capital. Forgone interest funds used to buy capital can be invested with interest.