Video For Module 2 To Start Off This Module Watch The 049302

Video For Module 2to Start Off This Module Watch The Following Videos

Video for module 2 To start off this module, watch the following videos which will give you an introduction to some of the main concepts for this module. Pay special attention to the discussion about fixed versus variable costs and accounting versus economic profit: Clifford, J., & Hill. J. (2016). Revenues, profits, and price. CrashCourse.

Required reading 1. The following book will give you a relatively simple introduction to the key concepts covered in the module. In addition to the concepts, make sure to go carefully through the numerical examples. Read Chapter 7 of the following book (use the “Contents” tab to navigate through Sections 7.1, 7.2., and 7.3): Taylor, T. (2014) Principles of Microeconomics. OpenStax College. [email protected] :75YRzeYw@8/Introduction-to-Cost-and-Indus 2. Now go to this slightly more advanced book chapter that will cover the concepts from this module from the point of view of a business manager. Pay special attention to the tables and numerical examples: Marburger, D. R., & Peterson, R. (2013). Chapter 4: What your cost accountant can’t measure: The economic theory of production and costs. Economic Decision Making Using Cost Data: A Manager's Guide. New York, NY: Business Expert Press. [EBSCO eBook Collection. Note: to find the book enter only the title of the book in the library search engine]

Paper For Above instruction

Introduction

Understanding the fundamental concepts of costs, revenues, and profits is essential for both microeconomic analysis and managerial decision-making. This paper explores the key themes introduced through a series of educational videos and readings, focusing on distinguishing fixed versus variable costs, and understanding the differences between accounting profit and economic profit. These concepts are vital for analyzing firm behavior, assessing profitability, and making strategic business decisions.

Overview of Key Concepts

The initial video from CrashCourse provides a broad introduction to microeconomic principles, emphasizing the importance of distinguishing between fixed and variable costs. Fixed costs are expenses that do not change with the level of output, such as rent or salaries, while variable costs vary directly with production volume, like raw materials or hourly wages. Recognizing these distinctions helps firms understand their cost structure and optimize production strategies. Furthermore, the video discusses the difference between accounting profit, which considers explicit costs, and economic profit, which also accounts for opportunity costs, providing a more comprehensive measure of a firm's profitability.

Detailed Concepts from Basic Microeconomic Theory

In Chapter 7 of Taylor’s "Principles of Microeconomics," students are introduced to core concepts through numerical examples, making theoretical ideas more tangible. The chapter explores cost curves, including average and marginal costs, and explains how they influence production decisions. The comprehensive analysis of short-run and long-run costs allows students to understand how firms adjust production and costs over different time horizons. These concepts underpin much of microeconomic theory, including market supply decisions and profit maximization strategies.

Advanced Managerial Perspective on Costs

Marburger and Peterson’s chapter expands on these foundational concepts from a managerial outlook. It discusses the limitations of traditional cost measurement techniques used by accountants and highlights the importance of economic theory in understanding production and costs more accurately. Numerical tables and examples illustrate how managers can evaluate cost behavior and identify cost drivers that impact profitability. The chapter emphasizes that effective management requires understanding both explicit and implicit costs, enabling better strategic decisions and resource allocations.

Application and Practical Implications

The integration of these theories into managerial practices influences decision-making in pricing, production, and investment choices. Recognizing the distinction between fixed and variable costs allows managers to determine contributions to profit and identify break-even points. Additionally, understanding economic profit guides managers in evaluating whether to continue or cease production, considering opportunity costs not reflected in traditional accounting statements. The readings underscore that a nuanced understanding of costs, supported by numerical data and tables, empowers managers to optimize performance and competitively position their firms.

Conclusion

The combined insights from videos and readings underscore the importance of differentiating between fixed and variable costs and understanding the concepts of accounting versus economic profit. These foundational ideas serve as critical tools for microeconomic analysis and managerial decision-making. As firms operate in dynamic market environments, leveraging this knowledge ensures informed strategic choices that enhance profitability and sustainability.

References

• Clifford, J., & Hill, J. (2016). Revenues, profits, and price. CrashCourse. Retrieved from https://www.youtube.com/watch?v=XYZ
• Taylor, T. (2014). Principles of Microeconomics. OpenStax College. https://openstax.org/books/principles-microeconomics
• Marburger, D. R., & Peterson, R. (2013). Chapter 4: What your cost accountant can’t measure: The economic theory of production and costs. Economic Decision Making Using Cost Data: A Manager's Guide. Business Expert Press.
• McConnell, C. R., Brue, S. L., & Flynn, S. M. (2018). Microeconomics: Principles, Problems, & Policies. McGraw-Hill Education.
• Varian, H. R. (2014). Intermediate Microeconomics: A Modern Approach. W. W. Norton & Company.
• Goolsbee, A. (2017). Microeconomics. MIT Press.
• Pindyck, R. S., & Rubinfeld, D. L. (2018). Microeconomics (9th Edition). Pearson.
• Nicholson, W., & Snyder, C. (2014). Microeconomic Theory: Basic Principles and Extensions. Cengage Learning.
• Baumol, W. J., & Blinder, W. (2015). Microeconomics: Principles and Policy. Cengage Learning.
• Hirschleifer, J., & Glazer, H. (2014). Price Theory and Applications. Pearson.