Explain the difference between explicit and implicit costs-Explain the difference between the short run and the long run

Week 7: Interactive activity

1. Explain the difference between explicit and implicit costs
2. Explain the difference between the short run and the long run
3. Explain the difference between variable and fixed costs
4. Apply the Principle of Diminishing Returns
5. Define economic cost and economic profit
6. Provide examples of production costs.
7. Evaluate a company’s cost structure
8. Recognize how changes in economic conditions affect a company’s profitability

7.2 Action Required:

Reading

Read the following to prepare for this week:

• Survey of Economics, Chapter 5: Production Technology and Cost

Video:

MIT OpenCourseWare video lecture series, “Productivity and Costs”)

Watch the following video(s), which you can access in the Weekly Media object or by clicking on the link(s) below: and answer the question.

http://www.youtube.com/watch?v=Q4iKuKAjzK0&list=SP61533C166E8B0028&index=10

7.3 Test your Knowledge (Question):

Question: Refer the video lecture, once an economist Malthus has predicted that production of food will slow down because of diminishing marginal product of labour, without increasing capital. So, continuous increase in demand due to increase in world population, some day may result in mass starvation. Now world population has increased more than 800% and there is no mass starvation as predicted.

Discuss what did Malthus get wrong?

7.4 Instructions

• Answer the question in test your knowledge section.
• Post your answer in the discussion board using the discussion link below (Week7: Interactive learning Discussion
• Choose a product of your own choice and complete the following. [5 Marks]
  1. Discuss which type of market does that product belong to? and why?
  2. Discuss the price elasticity of demand for this chosen product to increase total revenue.