Microeconomics,, 16th Canadian Edition

and accounting firms) and very common for large corporations. The number and importance of MNEs have increased greatly over the ...

Financing of Firms The money a firm raises for carrying on its business is sometimes called its financial capital, as distinct f ...

from such retained earnings adds to the value of the firm and hence raises the market value of existing shares. Debt The firm’s ...

Many firms raise money by issuing shares and selling them to investors. This share certificate for Massey-Ferguson, a company th ...

Goals of Firms Economists generally make two key assumptions about firm behaviour. First, firms are assumed to be profit-maximiz ...

Is It Socially Responsible to Maximize Profits? In recent years there has been growing public discussion of the need for firms, ...

banks or mortgage brokers—making unethical business decisions and thereby earning profits at the expense of other parties? Isn’t ...

policymakers to design new rules that will make it costly for firms to continue such actions. Various non-governmental organizat ...

occurred when Nike was heavily criticized for contracting its production to Asian “sweatshops,” where workers were treated very ...

7.2 Production, Costs, and Profits We must now specify a little more precisely the concepts of production, costs, and profits th ...

The items that make up the first group of inputs are called intermediate products because they are the output of one firm but th ...

1 Remember that production is a flow: It is so many units per period of time. For example, when we say that production rises fro ...

Costs and Profits Firms arrive at what they call profits by taking the revenues they obtain from selling their output and subtra ...

purchase of goods or services by the firm. The obvious explicit costs include the hiring of workers, the rental of equipment, in ...

$3000 per month that would be missed by the accountant who measures only the explicit cost of her wage at $1000 per month. Oppor ...

Table7-1 Accounting Versus Economic Profit for Ruthie’s Gourmet Soup Company accounting profits and economic profits are positiv ...

Is one of these concepts better than the other? No. Firms are interested in the financial return to their owners, which is what ...

Profits and Resource Allocation If all firms in some industry are earning economic profits, the owners of factors of production ...

Profit-Maximizing Output From this point on, when we talk about a firm’s profit, we will always mean economic profit, where all ...

Time Horizons for Decision Making Economists classify the decisions that firms make into three types: (1) how best to use existi ...