Managial Ecnomic Class Question 1-4

I. What is the difference(s) between explicit and implicit costs? (Be sure to define "implicit costs" as used in economics. ) Further, what are some of the implicit costs incurred by an entrepreneur in running a firm? How are these implicit costs estimated? Why must they be included as part of the costs of production? II. What is the difference between "accounting profit" and "economic profit" as these terms are used in economics? (Be sure to define each term. ) III . You run a business firm. What basic managerial economics principles would you use in setting the price of your product and determining your level of operations (i.e. your output level), in an attempt to maximize the profits of your firm? Outline the steps you would follow in your decision making. Compare break-even analysis and (the more traditional ) profit maximization approach. How are they alike? How are they different? Strengths and weaknesses of each