- What is money cost and opportunity cost?
- Is opportunity cost a real cost?
- What is meant by real cost how does it differ from monetary cost?
- What are the 4 types of money?
- Who gave the concept of real cost?
- What is meant by sunk cost?
- What is a money cost?
- What are the 3 types of money?
- What is a real life example of opportunity cost?
- How is opportunity cost defined?
- What is opportunity cost simple words?
- What are average costs?
What is money cost and opportunity cost?
When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource.
If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend the money on something else..
Is opportunity cost a real cost?
The real cost is the price paid by the consumer for consuming a good. Opportunity cost is the foregone cost of the next best alternative present in…
What is meant by real cost how does it differ from monetary cost?
It cannot be subjected to accurate monetary measurement. In reality, real costs seldom equal money expenses of production. The real costs can also be measured at constant prices, i.e., by adjusting money cost for rise in the prices.
What are the 4 types of money?
In a Nutshell. The four most relevant types of money are commodity money, fiat money, fiduciary money, and commercial bank money. Commodity money relies on intrinsically valuable commodities that act as a medium of exchange. Fiat money, on the other hand, gets its value from a government order.
Who gave the concept of real cost?
Jacob VinerThe concept of real cost terms of trade was introduced by Jacob Viner.
What is meant by sunk cost?
A sunk cost refers to money that has already been spent and which cannot be recovered. … A sunk cost differs from future costs that a business may face, such as decisions about inventory purchase costs or product pricing.
What is a money cost?
Money Costs: Money cost is also known as the nominal cost. It is nothing but the expenses incurred by a firm to produce a commodity. … 10000, and then it will be called the money cost of producing 200 chairs.
What are the 3 types of money?
Key TakeawaysMoney comes in three forms: commodity money, fiat money, and fiduciary money. … Commodity money derives its value from the commodity of which it is made, while fiat money has value only by the order of the government.Money functions as a medium of exchange, a unit of account, and a store of value.
What is a real life example of opportunity cost?
A student spends three hours and $20 at the movies the night before an exam. The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment).
How is opportunity cost defined?
Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. … Understanding the potential missed opportunities foregone by choosing one investment over another allows for better decision-making.
What is opportunity cost simple words?
Opportunity cost is the value of the next best thing you give up whenever you make a decision. It is “the loss of potential gain from other alternatives when one alternative is chosen”. … For example, opportunity cost is how much leisure time we give up to work.
What are average costs?
Definition: The Average Cost is the per unit cost of production obtained by dividing the total cost (TC) by the total output (Q). By per unit cost of production, we mean that all the fixed and variable cost is taken into the consideration for calculating the average cost. Thus, it is also called as Per Unit Total Cost.