Economic Costs | Eonomics

Economic Costs refer to the sum of opportunity costs and accounting costs. It is the cost of choosing one economic activity over another. This means when we look at economic costs, it includes all the costs incurred to carry out a particular activity that have to be paid and the opportunity cost or the benefits from the next best alternative which had to be forgone in order to carry out this activity. Copy the link given below and paste it in new browser window to get more information on Economic Costs:- http://www.transtutors.com/homework-help/economics/economics-costs.aspx

1. Economic Costs

2. Economic Cost v/s Accounting Cost Accounting costs are the explicit costs, costs paid out from your pocket Economic costs are the sum of accounting costs and implicit costs Implicit costs are the opportunity costs, the benefits of the next best alternative forgone Accounting costs Economic costs Explicit costs Explicit cost + implicit cost Measured strictly in monetary terms Costs can be measured in terms other than money Internal and external uses Internal use only

3. Types of costs Total cost- total fixed costs + total variable costs Total fixed cost (TFC)- costs paid out to inputs that are constant at all levels of output Total variable cost (TVC)- costs paid out to inputs that have to be changed as level of output changes

4. Definition Economic costs are the sum of explicit costs paid out and implicit or imputed costs that is the benefits from the next best alternative forgone Economic cost= accounting costs (explicit costs) + opportunity costs (implicit cost)

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