question
accounting profit
answer
total revenue - explicit costs
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economic profit
answer
a firm's total revenue minus its explicit and implicit costs
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normal profit
answer
the payment made by a firm to obtain and retain entrepreneurial ability
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marginal cost
answer
the cost of producing one more unit of a good
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paradox of value
answer
apparent contradiction between the high value of a nonessential item and the low value of an essential item
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explicit costs
answer
The actual payments a firm makes to its factors of production and other suppliers.
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implicit costs
answer
Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur
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economies of scale
answer
factors that cause a producer's average cost per unit to fall as output rises
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diseconomies of scale
answer
the property whereby long-run average total cost rises as the quantity of output increases
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