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WIS: EconomicsLecture on Costs of Production
The Meaning of Costs
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Opportunity costs
–
meaning of opportunity cost
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examples
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Measuring a firm’s opportunity costs
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factors not owned by the firm: explicit costs
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factors already owned by the firm: implicitcosts
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irrelevance of:
•
historic costs
•
replacement costs
Production in the Short run
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Production functions
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factors of production
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labour
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land and raw materials
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capital
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entrepreneurship
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the relationship between inputs and output
•
TPP = ƒ
(
F
1
,
F
2
,
F
3
, …
F
n
)
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