# Intermediate Microeconomics

## 5. Costs

Economic cost includes both explicit and implicit costs. Put differently, economic cost measures opportunity cost. In these Pencasts, we cover the different ways costs are measured, short-run costs, long-run costs, how per-unit and lump-sum taxes affect firms' costs, cost minimization, and changes in factor prices. While examining a representative firm's costs is somewhat dry and technical, a thorough understanding of a firm's costs helps us to understand subsequent topics, such as perfect competition, monopoly, oligopoly, and monopolistic competition.

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## Short-Run Cost MesuresThis Pencast defines different short-run cost measures, including variable cost, fixed cost, total cost, marginal cost, average variable cost, average fixed cost and average total cost. |

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## Short-Run Costs: An ApplicationThis Pencast demonstrates how to determine marginal cost, average fixed cost, average variable cost and average total cost using a explicit cost function. |

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## Shapes of Cost CurvesThis Pencast presents the shapes of difference cost curves, including the marginal cost, average variable cost, average fixed cost, and average total cost curves. |

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## Per-Unit Taxes and Cost CurvesThis Pencast illustrates how a per-unit tax imposed on firms affects their cost curves. |

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## Lump-Sum Taxes and Cost CurvesThis Pencast illustrates how a lump-sum tax imposed on firms affects their cost curves. |

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## Long-Run CostsIn this Pencast, we discuss long-run costs and how they differ from short-run costs. In addition, we define an isocost line and show how to plot an isocost line. |

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## Minimizing CostsIn this Pencast, we demonstrate how a firm minimizes its costs, given a particular level of output. In particular, we use the Lagrangian method to derive a condition for cost minimization. |

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## Maximizing OutputIn this Pencast, we illustrate how a firm maximizes its output, given a particular level of costs. In particular, we use the Lagrangian method to derive a condition for output maximization. |

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## Factor Price Changes: Part IIn this Pencast, we demonstrate how to find the optimal combination of capital and labor for a given a production function, output level, and factor prices. |

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## Factor Price Changes: Part IIIn this Pencast, we demonstrate how to find the optimal combination of capital and labor when factor prices change. |

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## Factor Price Changes: Part IIIIn this Pencast, use the information provided in the previous two pencast to illustrate graphically how a change in factor prices affects the optimal combination of capital and labor. |