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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.
Implicit contract theory. 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 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.
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 ...
The basic premise of rational choice theory is that the decisions made by individual actors will collectively produce aggregate social behaviour. The theory also assumes that individuals have preferences out of available choice alternatives. These preferences are assumed to be complete and transitive.
Capitalism. In economics, profit is the difference between revenue that an economic entity has received from its outputs and total costs of its inputs, also known as surplus value. [ 1] It is equal to total revenue minus total cost, including both explicit and implicit costs. [ 2]
Economics is the study of the production, distribution, and consumption of goods and services. Managerial economics involves the use of economic theories and principles to make decisions regarding the allocation of scarce resources. [ 2] It guides managers in making decisions relating to the company's customers, competitors, suppliers, and ...