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Opportunity cost is a basic microeconomics concept, maybe one you learned in a long-ago and hazily recollected 8 a.m. Econ 101 lecture. If you need a refresher, opportunity cost is the benefit you ...
The purpose of calculating economic profits (and thus, opportunity costs) is to aid in better business decision-making through the inclusion of opportunity costs. In this way, a business can evaluate whether its decision and the allocation of its resources is cost-effective or not and whether resources should be reallocated.
Similarly, if the third kilogram of seeds yields only a quarter ton, then the marginal cost equals per quarter ton or per ton, and the average cost is per 7/4 tons, or /7 per ton of output. Thus, diminishing marginal returns imply increasing marginal costs and increasing average costs. Cost is measured in terms of opportunity cost. In this case ...
The opportunity cost of any activity is the value of the next-best alternative thing one may have done instead. Opportunity cost depends only on the value of the next-best alternative. It does not matter whether one has five alternatives or 5,000. Opportunity costs can tell when not to do something as well as when to do something. For example ...
The farm sector is frequently cited as a prime example of the perfect competition economic paradigm. In Asia , the Faculty of Agricultural Economics was established in September 1919 in Hokkaido Imperial University , Japan , as Tokyo Imperial University 's School of Agriculture started a faculty on agricultural economics in its second ...
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In microeconomics, a production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB) is a graphical representation showing all the possible options of output for two that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time.
In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can comprise any of the factors of production (including labor, capital, or land) and taxation .