Lesson Plan
The Firm and Production
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I. The organization of firms
- - definition of 3 different types
- - single proprietorship
- - partnership
- - corporation
- - privately held vs public corporations
- - advantages of each type
- - disadvantages of each type
- - sources of capital
- - how do firms make decisions?
- - firms are assumed to act to maximize profits
- - how does a firm use its profits?
- - dividends
- - retained earnings
- - taxes
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II. Definitions (to be used with our discussion of firms
throughout the semester).
- - production
- - the production function
- - inputs (resources or factors of production)
- - the production process or function
- - output
- - when does production occur?
- - time and production
- - what is the short-run in production?
- - what is the long-run in production?
- - what is the very long-run in production?
- - examples
- - the economic costs of production
- - what are explicit costs?
- - what are implicit costs?
- - what are the total costs of production?
- - profit
- - what is accounting profit?
- - what is economic profit?
- - what is normal profit?
- - relationship between the three different measures of profit.
- - which measure is used by economists?