Chapter 7 Flashcards
(31 cards)
Costos económicos
- The payment that must be made to obtain and retain the services of a resource
- Es la suma del total de costos explícitos y el costo implícito.
Explicit Costs - Costos Explícitos
- Monetary payments
- De carácter contabilístico, son los pagos monetarios que un negocio hace para obtener y retener los servicios de quienes le suplen los recursos que el negocio no posee y necesita para producir un bien o servicio.
Implicit Costs - Costos Implícitos
• costo de oportunidad, o el sacrificio que el negocio (o su dueño) hace usando los recursos económicos y ahorro monetario que ya posee además de su tiempo para sí mismo o su negocio en lugar de hacerlos disponibles en un mercado para la venta.
- Value of next best use
- Self-owned resources
- Includes normal profit
Accounting profit - Ganancia Contabilística
AP = Revenue - Explicit Costs
Economic profit - Ganancia económica
EP = Accounting Profit – Implicit Costs
Economic profit (to summarize)
EP = Total Revenue – Economic Costs EP = Total Revenue – Explicit Costs – Implicit Costs
Economic Costs: Short Run
- Some variable inputs
* Fixed plant
Economic Costs: Long Run
- All inputs are variable
- Variable plant
- Firms enter and exit
Short Run Production Relationships
• Total Product (TP)
- Marginal Product (MP)
- MP = Change in TP / Change in Labor Input
- Average Product (AP)
- AP = TP / Units of Labor
Law of Diminishing Returns
- Resources are of equal quality
- Technology fixed
- Variable resources are added to fixed resources
- At some point, marginal product will fall
- Rationale
Short Run Production Costs
- Fixed Costs (TFC)
- Variable Costs (TVC)
- Total Costs (TC)
Short Run Production Costs: Fixed Costs
• Costs do not vary with output
Short Run Production Costs: Variable Costs
• Costs vary with output
Short Run Production Costs: Total Costs
- Sum of TFC and TVC
* TC = TFC + TVC
Per-Unit, or Average, Costs
- Average Fixed Costs
- Average Variable Costs
- Average Total Costs
- Marginal Costs
Average Fixed Costs
AFC = TFC/Q
Average Variable Costs
AVC = TVC/Q
Average Total Costs
ATC = TC/Q
Marginal Costs
MC = ΔTC/ΔQ
Long Run Productions Costs
- The firm can change all input amounts, including plant size.
- All costs are variable in the long run.
- Long run ATC
- Different short run ATCs
Economies of Scale
- Labor specialization
- Managerial specialization
- Efficient capital
- Other factors
- Constant returns to scale
Diseconomies of Scale
- Control and coordination problems
- Communication problems
- Worker Alienation
- Shirking
Minimum Efficient Scale (MES):
- Lowest level of output where long- run average costs are minimized
- Can determine the structure of the industry
Forma de “U”
• Los costos de producción de largo plazo
tienen forma de “U”.
