Google
Tuesday 
April 13, 2021 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
CAPITAL ACCOUNT SURPLUS: An imbalance in a nation's balance of payments capital account in which payments received by the country for selling domestic assets exceed payments made by the country for purchasing foreign assets. In other words, investment by the domestic economy in foreign assets is greater than foreign investment in domestic assets. This is generally a desireable situation for a domestic economy. However, in the wacky world of international economics, a capital account surplus is often balanced by a current account deficit, which is not generally considered a desireable situation. If, however, the current account does not balance out the capital account, then a capital account surplus contributes to a balance of payments surplus.

Visit the GLOSS*arama


COST:

An alternative term for economic or opportunity cost, which is the highest valued alternative foregone in the pursuit of an activity. Opportunity cost is one of the most fundamental concepts used in the study of economics, hence when the term cost is used in the study of economics without modification, it usually means economic or opportunity cost.
Because economists like to economize on effort, the succinct term cost is also frequently used in lieu of opportunity cost or economic cost. In fact, whenever the term cost is used in economics, absent of any modifiers, it inevitably means economic or opportunity cost.

Starting With Scarcity

The ultimate source of cost is the pervasive problem of scarcity (unlimited wants and needs, but limited resources). Whenever limited resources are used to satisfy one want or need, an unlimited number of other wants and needs remain unsatisfied. Hence pursuing one activity means alternatives are not pursued. Herein lies the essence of cost. Doing one thing prevents doing another.

Cost Plus...

There are a seemingly endless number of modifiers that can be used with the term cost. Here is a lengthy, but necessarily incomplete list.
  • Accounting Cost: An actual outlay or expense incurred in production that shows up a firm's accounting statements or records, which may or may not be an opportunity cost.

  • Average Cost: The opportunity cost incurred per unit in the production of a good, calculated by dividing the total cost of production by the quantity of output produced

  • Explicit Cost: An opportunity cost that involves a money payment and usually a market transaction.

  • External Cost: An opportunity that is not included in the market price of a good because it is not included in the supply price.

  • Fixed Cost: An opportunity that does not change with changes in the quantity of output produced.

  • Historical Cost: An accounting principle stating that expenses are recorded in terms of original or acquisition cost, which may or may not reflect opportunity cost or current market value.

  • Implicit Cost: An opportunity cost that does NOT involve a money payment or a market transaction.

  • Marginal Cost: The change in total opportunity cost resulting from a change in the quantity of output produced by a firm in the short run.

  • Production Cost: The opportunity cost of using labor, capital, land, and entrepreneurship in the production of goods and services.

  • Total Cost: The opportunity cost incurred by all of the factors of production used by a firm to produce a good or service, including wages paid to labor, rent paid for the land, interest paid to capital owners, and a normal profit paid to entrepreneurs.

  • Variable Cost: An opportunity cost that changes with changes in the quantity of output produced.
This is a modest list at best. Other terms contain the word "cost" include average variable cost, total variable cost, average fixed cost, total fixed cost, total factor cost, average factor cost, and marginal factor cost. Other "cost" terms pop up in the study of economics as attention is directed to specific topics and issues.

<= CORPORATIONCOST OF LIVING =>


Recommended Citation:

COST, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2021. [Accessed: April 13, 2021].


Check Out These Related Terms...

     | economic cost | opportunity cost | explicit cost | implicit cost | free good | free resource | free lunch |


Or For A Little Background...

     | scarcity | limited resources | unlimited wants and needs | satisfaction | value |


And For Further Study...

     | economics | dismal science | three questions of allocation | division of labor | economic good | first rule of scarcity | factors of production | opportunity cost, production possibilities | investment, production possibilities | accounting cost | normal profit | short-run production analysis | total cost | production cost |


Search Again?

Back to the WEB*pedia


APLS

BLACK DISMALAPOD
[What's This?]

Today, you are likely to spend a great deal of time touring the new suburban shopping complex hoping to buy either a coffee table shaped like the state of Florida or storage boxes for your summer clothes. Be on the lookout for deranged pelicans.
Your Complete Scope

This isn't me! What am I?

The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
"Education is the ability to listen to almost anything without losing your temper or your self-confidence. "

-- Robert Frost

IS-LM
Investment/Saving-Liquidity/Money
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2021 AmosWEB*LLC
Send comments or questions to: WebMaster