Ch 11 Flashcards
1
Q
An economic decision is necessary as……
A
Resources are scarce
2
Q
Explicit costs
A
Direct, out of pocket payments for labour, capital, energy, and materials
3
Q
Implicit costs
A
A forgone opportunity rather than explicit current expenditure
4
Q
Profit
A
The difference between revenue and costs
5
Q
Accounting profit
A
Revenue - Explicit costs
6
Q
Economic profit
A
Revenue - explicit cost - implicit cost
7
Q
Types of profit
A
Accounting profit and economic profit
8
Q
Sunk costs
A
A cost that has already been incurred and can not be recovered and should be ignored in decisions an about how much to produce. Can’t be part of opportunity costs either
