Summary: Microeconomics: Canadian Edition 3Rd Edition | 9781319120061 | Paul Krugman

Read the summary and the most important questions on Microeconomics: Canadian Edition 3rd Edition | 9781319120061 | Paul Krugman

• 9 decision making by individuals and firms

• Why does a good decision making depend on accurately defining costs and benefits?

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• What is the difference between Explicit and implicit cost?

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• What is the difference  between accounting profit and economics profit and which profit is the correct basis for decision making , and why?

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• Ehat are the three types of economic decisions?

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• Why doe people behave  in irrational yet predictable ways sometimes?

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• Why are decisions involving time different and how they should be made

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  (chapter index)

• 9.1 Costs, Benefits , and Profits

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• Why do economists use Explicit and Implicit costs? What relationship do they use it to compare with? That do they mean by those relationships

  • They use these costs  to compare the relationship between opportunity cost and the monetary outlays
  • Meaning the money they forgo, and the time they spend, and the future income that they would gain as a result of decisions.

• Why do we need to know the cost and benefit concept , what do we asses with that concept

  In order to asses the cost and benefit and make either or decisions

• 9.1.1 explicit versus implicit costs

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• Why is Explicit cost the most obvious cost?

  Explicit cost is the monetary cost that a person accrues by making a decision

• What is significant about impilicit costs?

  It is the value or opportunity cost in (dollar terms) of the benefit that are forgone.