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This has implications to both labor and capital: Assuming fixed capital, population growth dilutes the scarcity of labor in relation to capital. If the population growth outpaces the growth in capital by 10% this may translate into a 20% shift in the balance of employment to the labor-intensive industries.
A standard way of viewing these costs is per unit, or the average. Economists tend to analyse three costs in the short-run: average fixed costs, average variable costs, and average total costs, with respect to marginal costs. The average fixed cost curve is a decreasing function because the level of fixed costs remains constant as the output ...
In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can comprise any of the factors of production (including labor, capital, or land) and taxation .
For example, Fred Moseley argues Marx understood "value" to be a "macro-monetary" variable (the total amount of labor added in a given year plus the depreciation of fixed capital in that year), which is then concretized at the level of individual prices of production, meaning that "individual values" of commodities do not exist. [70]
Namely, the purchase of a new machine to increase production and last for years is a capital cost. Capital costs do not include labor costs (they do include construction labor). Unlike operating costs, capital costs are one-time expenses but payment may be spread out over many years in financial reports and tax returns. Capital costs are fixed ...
Fixed costs are costs that relate to the fixed input, capital, or rK, where r is the rental cost of capital and K is the quantity of capital. Variable costs (VC) are the costs of the variable input, labor, or wL, where w is the wage rate and L is the amount of labor employed. Thus, VC = wL. Marginal cost (MC) is the change in total cost per ...
The economic value of physical outputs minus the economic value of physical inputs is the income generated by the production process. By keeping the prices fixed between two periods under review we get the income change generated by a change of the production function.
variable capital, which refers to labor-inputs, where the cost is "variable" based on the amount of wages and salaries paid during an employee's contract/employment, fictitious capital, which refers to intangible representations or abstractions of physical capital, such as stocks, bonds and securities (or "tradable paper claims to wealth")