ECON 1011 Chapter Notes - Chapter 10: Process Function, Comparative Advantage, Production Function

44 views3 pages
School
Department
Course
zsjohn721 and 36692 others unlocked
ECON 1011 Full Course Notes
66
ECON 1011 Full Course Notes
Verified Note
66 documents

Document Summary

A firm is an organization created to produce goods good for firm when they sell products. There is a legal structure: sole proprietorship. One individual owns all the capital and keeps profit assets are liable in disputes: partnership. Multiple people own capital, share profit, and require a contract to identify shares and operating rules. All members" assets are liable in disputes: corporation. Shares in corporation are sold to finance capital purchases. All share owners claim a portion of profit. Owners" personal assets are not at risk. Role of owners or entrepreneurs: have an original idea that is profitable; ability to manage firm; earn excess profit; bear risk of failure; hire people. Explicit wages to workers, payments for intermediate inputs, payments for shipping, insurance, electricity. Opportunity costs difficult to measure; affect decisions about what to produce; focuses on comparative advantage: each person should produce with lowest opportunity cost; opportunity cost includes both explicit and implicit costs.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents