Explicit Costs are the cost of resources traded in external markets. Implicit Costs are the value of resources sacrificed by the owner for the sake of the company.
The opportunity cost is defined as the second-best alternative use of the resource. A use that you sacrifice in using the resource in this way.
Trade-Offs occur where choosing one option means sacrificing something in return. There is a cost to the choice.
Selfish and Social Interests produce the Incentives that motivate decision-making processes.
The Circular Flow Diagram depicts the national economy — the parties, the markets, and how they interact.
Value Creation is the process of creating new, greater value from the same, original resource. This generally occurs through manufacturing, trade, or marketing
The five principal ways to categorize resources include:
1) Natural Resources v. Man-Made Resources
2) Unlimited Resources v. Limited Resources
3) Tangible Resources v. Intangible Resources
4) Variations of Business Assets
5) Capital v. Labor
Economics is the study of how and why people, organizations, and governments create, gather, trade, and divide resources.
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