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10 Cards in this Set
- Front
- Back
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Expenditures in the past that cannot be recovered.
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Sunk Costs
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The benefit forgone as a result of choosing one course of action rather than another.
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Opportunity Costs
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The alternative actions associated with an opportunity cost are referred to as an:
(Give example) |
Opportunity Set
For Friday night, this includes the movies, a concert, football game, studying, partying , etc. |
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The resources expended for actions actually undertaken.
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Historical Costs
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How do you calculate Average Costs?
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Total costs / # of produced units
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Define Marginal Costs.
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The cost of producing one more unit.
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What are the costs incurred when there is no production.
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Fixed Costs
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Additional costs incurred when output is expanded.
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Variable Costs
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What is a Mixed or Semivariable Cost?
(Give example) |
Cost categories that cannot be referred to as purely a fixed or variable cost.
Electricity, utlilties |
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What are Step Costs?
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Expenditures fixed over a range of output levels.
Increased level of managers/staff to keep up with output. Once a level of transactions on a computer reaches a certain level, a new computer must be implemented. |
