Card Set Information
Chapter 1 Economics
What is managerical economics?
Managerial economics focuses on the application of microeconomic
(study of individual segments of economy)
theory to business problems.
What a firm's owners give up to use resources to produce goods or services.
Resources owned by others and hired, rented, or leased in resource markets. Ex: labor services, raw materials, and capital equipment
Resources owned and used by a firm. Ex. money provided, time of owner provided, and any land, buildings or capital equipment owned and used by firm.
Total Economic Cost
Sum of opportunity costs of market-supplied resources plus opportunity costs of owner supplied resources
Monetary opportunity costs of using market-supplied resources.
or the amount of money sacrificed by firm owners to get market-supplied resources
Nonmonetary opportunity costs of using owner-supplied resources.The best return the owners of the firm could have received had they taken their own resource to market instead of using it themselves
What are the three types of implicit cost?
-the opportunity cost of cash provided to a firm by its owners