MICROECONOMICS PRINCIPLES WITH ETHICS

MODULE 9: Theory of Firms - Production Costs

Textbook Reading:

Presentation Slides:

Additional Useful Information:

Khan Academy - Economic vs. Accounting Profit
This follows closely with the approach offered in this lesson.

Microeconomics - Building Producer Theory
This open source chapter from an economics textbook offers an alternative discussion of production costs.

OVERVIEW

In this module we first introduce the distinction between accounting and economic profit. We then introduce the basic cost concepts that are used to describe the behavior of profit maximizing firms. Included is a discussion of fixed costs, variable costs, marginal costs, and average costs. One will also learn about returns to scale and economies of scale in production.

VIDEO LECTURE

Introduction to Production - 5 minutes

Accounting vs Economic Profit - 23 minutes

Production Cost Concepts - 38 minutes

Reality Check: Comments on Production Costs - 6 minutes