nicholson微观经济理论（答案+PPT+习题库）-ch08.pptVIP

Chapter 8 COST FUNCTIONS Definitions of Costs It is important to differentiate between accounting cost and economic cost the accountant’s view of cost stresses out-of-pocket expenses, historical costs, depreciation, and other bookkeeping entries economists focus more on opportunity cost Definitions of Costs Labor Costs to accountants, expenditures on labor are current expenses and hence costs of production to economists, labor is an explicit cost labor services are contracted at some hourly wage (w) and it is assumed that this is also what the labor could earn in alternative employment Definitions of Costs Capital Costs accountants use the historical price of the capital and apply some depreciation rule to determine current costs economists refer to the capital’s original price as a “sunk cost” and instead regard the implicit cost of the capital to be what someone else would be willing to pay for its use we will use v to denote the rental rate for capital Definitions of Costs Costs of Entrepreneurial Services accountants believe that the owner of a firm is entitled to all profits revenues or losses left over after paying all input costs economists consider the opportunity costs of time and funds that owners devote to the operation of their firms part of accounting profits would be considered as entrepreneurial costs by economists Economic Cost The economic cost of any input is the payment required to keep that input in its present employment the remuneration the input would receive in its best alternative employment Two Simplifying Assumptions There are only two inputs homogeneous labor (l), measured in labor-hours homogeneous capital (k), measured in machine-hours entrepreneurial costs are included in capital costs Inputs are hired in perfectly competitive markets firms are price takers in input markets Economic Profits Total costs for the firm are given by total costs = C = wl + vk Total revenue for the firm is given by total revenue = pq = pf(k,l) Economic profit