Quick start today. Talking about costs.
- Actual Cost of a good or service is the amount paid it.
- Opportunity Cost is the cost of the next-best alterative choice.
- Short-Run Costs are costs in a period which doesn’t allow one to change the fixed inputs, such a factories, technology, organization size, and so forth.
- Long-Run Costs are costs in a period long enough to change all the inputs, even fixed inputs.
- Past Costs are cost which have already been incurred and cannot be recovered.
- Future Costs are costs which will be incurred later, and over which managers can still excercise control.
- Explicit Costs are costs which can be easily identified or recognized. Closely related to actual costs.
- Implicit Costs are costs which are not easily recognized, such as opportunity costs.
- Imputed Costs are costs which were not spent, but would have been spent in the absence of the owner’s resources.
- Accounting Costs are very similar to actual costs. Accounting costs are recordable costs; costs which can be quantified.
- Economic Costs are the combination of explicit costs, implicit, and imputed costs. The combination of all costs that are paid or would have normally been paid.
- Fixed Costs are costs which will remain unchanged throughout all levels of production.
- Variable Costs are costs which change depending on the level of output. Positive relationship, normally, meaning that as output increases, variable costs increase.
- Semi-Fixed Costs are costs which are fixed for certain levels of output, and then increase. If graphed, slices of a semi-fixed may appear to be fixed, but the overall trend of the graph line is characteristic of variable costs.
- Semi-Variable Costs are effectively the same as semi-fixed costs.
- Total Costs is the sum of variable and fixed costs.
- Marginal Costs are the costs of producing one more unit of output. A graph of marginal costs will be U shaped, indicating that maximum efficiency is not at the extremes of possible production.