Summary Microeconomics: Canadian Edition 3rd Edition

A snapshot of the summary - Microeconomics: Canadian Edition 3rd Edition Author: Paul Krugman ISBN: 9781319120061

• 9 decision making by individuals and firms

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

  Lets find out
• What is the difference between Explicit and implicit cost?

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

  Lets find out
• Ehat are the three types of economic decisions?

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

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

  Lets find out
  (chapter index)

• 9.1 Costs, Benefits , and Profits

• 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

• 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.