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Capital cost. Capital costs are fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment used in the production of goods or in the rendering of services. In other words, it is the total cost needed to bring a project to a commercially operable status. Whether a particular cost is capital or not depend on ...
e. The labor theory of value (LTV) is a theory of value that argues that the exchange value of a good or service is determined by the total amount of " socially necessary labor " required to produce it. The contrasting system is typically known as the subjective theory of value. The LTV is usually associated with Marxian economics, although it ...
In such industries, labor costs are more of a concern than capital costs. Labor intensity is measured by its proportion [clarification needed] to the amount of capital to produce goods or services. The higher the labor cost, the more labor intense is the business. Labor cost can vary because businesses can add or subtract workers based on ...
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 utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function. There are four basic resources or factors of production: land, labour, capital and entrepreneur (or enterprise). [ 1 ] The factors are also frequently labeled " producer goods or services " to distinguish ...
Capitalism. In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and labour power. The concept originated in Ricardian socialism, with the term "surplus value ...
Cost of capital. In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". [ 1 ] It is used to evaluate new projects of a company.
In economics, capital goodsor capitalare "those durable produced goods that are in turn used as productive inputsfor further production" of goods and services.[1] A typical example is the machinery used in a factory. At the macroeconomiclevel, "the nation's capital stockincludes buildings, equipment, software, and inventories during a given year."