生产经济学-Websterinchina.pptVIP

Lecture five Cost analysis Cost definition Accounting cost and opportunity cost Explicit vs. Implicit Cost Incremental cost and Sunk cost Fixed cost and variable cost Cost analysis Example: $100000 can be invested in the following: save in the bank, interest return is $4000；buy bonds，bond income $10000；invest in stocks，revenue is $12000。 the money saves in bank, opportunity cost is $12000. The money buys bonds, opportunity cost is $12000. The money invests in stocks, opportunity cost is $10000. Accounting cost and opportunity cost Accounting profit Economic profit Economic profit = Total revenue Explicit costs –Implicit costs Accounting cost and opportunity cost: depreciation measurement Capital assets: a durable input that depreciates with use, time and onbsolescence A machine, is purchased for 10000, and is expected to have a 10-year life; straight-line method of depreciation is 1000;but Current market value:8000;Value after one year:6800 Economist’s Depreciation: 8000-6800=1200 Accounting cost and opportunity cost: Inventory valuation Opportunity cost Incremental Cost and Sunk cost Incremental cost: the overall change that a company experiences by producing one additional unit of good Sunk cost: A cost incurred regardless of the alternative action chosen in a decision-making problem Economies and diseconomies of scale Economies of scale Declining long-run average costs as the rate of output for a product, plant, or firm is increased. Internal economies of scale Learning curve effect External economy of scale Long-Run Average Marginal Cost Curves Product-lever economics A number of different sources of scale economies are associated with producing larger volumes of a single product Plant-level economics Sources of scale economies at the plant level include capital investment, overhead, and required reserves of maintenance parts and personnel. Firm-level economics Scale economies are associated with the overall size of the firm, aften can only be