ECONOMIC COST Meaning and
Definition
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Economic cost refers to the total value of resources used or given up in order to produce or acquire a good or service. It represents the monetary and non-monetary sacrifices made by an individual, firm, or society to achieve a particular economic outcome.
Economic cost consists of both explicit and implicit costs. Explicit costs are the actual out-of-pocket expenses incurred in the production process, such as wages, rent, raw materials, and utility bills. These costs are typically recorded and easily quantifiable. On the other hand, implicit costs are the opportunity costs associated with using resources in a particular way. They represent the value of the next best alternative that is forgone in order to pursue a particular economic activity. Implicit costs are often more difficult to measure since they involve subjective evaluations.
In addition to the costs associated with production, economic cost also includes the costs of consumption. This refers to the value of resources and goods that individuals give up or forego in order to satisfy their wants and needs.
By considering both explicit and implicit costs, economic cost provides a comprehensive measure of the sacrifices made to achieve economic objectives. It helps individuals, firms, and policymakers make informed decisions regarding resource allocation and production choices. Understanding economic cost is crucial for evaluating the efficiency and profitability of economic activities and for assessing the overall economic well-being of a society.
Common Misspellings for ECONOMIC COST
- wconomic cost
- sconomic cost
- dconomic cost
- rconomic cost
- 4conomic cost
- 3conomic cost
- exonomic cost
- evonomic cost
- efonomic cost
- edonomic cost
- ecinomic cost
- ecknomic cost
- eclnomic cost
- ecpnomic cost
- ec0nomic cost
- ec9nomic cost
- ecobomic cost
- ecomomic cost
- ecojomic cost
- ecohomic cost
Etymology of ECONOMIC COST
The word "economic" originated from the Latin word "oeconomicus", which in turn is derived from the Greek word "oikonomikos", meaning "pertaining to household management". The term "economic" initially referred to the management and administration of limited resources within a household or a community. It later expanded to encompass the entire field of studying production, distribution, and consumption of goods and services in a broader socio-economic context.
The word "cost" has its roots in the Old French word "coste", meaning "rib" or "flank". In Medieval Latin, the term "costa" developed as a concept of "expenditure" or "expense". The meaning evolved to represent the value associated with producing or acquiring something, considering both monetary and non-monetary factors.
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