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Implicit cost. In economics, an implicit cost, also called an imputed cost, implied cost, or notional cost, is the opportunity cost equal to what a firm must give up in order to use a factor of production for which it already owns and thus does not pay rent. It is the opposite of an explicit cost, which is borne directly. [1]
Opportunity cost, as such, is an economic concept in economic theory which is used to maximise value through better decision-making. In accounting, collecting, processing, and reporting information on activities and events that occur within an organization is referred to as the accounting cycle.
The economics term cost, also known as economic cost or opportunity cost, refers to the potential gain that is lost by foregoing one opportunity in order to take advantage of another. The lost potential gain is the cost of the opportunity that is accepted. Sometimes this cost is explicit: for example, if a firm pays $100 for a machine, its cost ...
Economic cost. Economic cost is the combination of losses of any goods that have a value attached to them by any one individual. [ 1][ 2] Economic cost is used mainly by economists as means to compare the prudence of one course of action with that of another. The comparison includes the gains and losses precluded by taking a course of action as ...
In economics, implicit contracts refer to voluntary and self-enforcing long term agreements made between two parties regarding the future exchange of goods or services. Implicit contracts theory was first developed to explain why there are quantity adjustments ( layoffs) instead of price adjustments (falling wages) in the labor market during ...
The personal consumption expenditure ( PCE) measure is the component statistic for consumption in gross domestic product (GDP) collected by the United States Bureau of Economic Analysis (BEA). It consists of the actual and imputed expenditures of households and includes data pertaining to durable and non-durable goods and services.
In contract law, an incomplete contract is one that is defective or uncertain in a material respect. A complete contract in economic theory means a contract which provides for the rights, obligations and remedies of the parties in every possible state of the world. [ 1] However, since the human mind is a scarce resource and the mind cannot ...
In economics, an externality is a cost or benefit that affects a party who did not choose to incur that cost or benefit. [32] [33] Negative externalities are a well-known feature of the "tragedy of the commons". For example, driving cars has many negative externalities; these include pollution, carbon emissions, and traffic