Changes

Costs are negative rewards associated with a choice. Typically, rational actors will choose to incur costs in order to obtain rewards of a greater magnitude.

'''Costs''' are negative rewards associated with a choice. Typically, rational actors will choose to incur costs in order to obtain rewards of a greater magnitude.

==Accounting Costs==

==Accounting Costs==

Accounting costs refer to money-costs of a transaction:<br />

Accounting costs refer to money-costs of a transaction:<br />

Nominal cost is the cost in the prevailing currency of the time and place.<br />

Nominal cost is the cost in the prevailing currency of the time and place.<br />

Real cost is nominal cost adjusted for inflation, or changes in the price of money.<br />

Real cost is nominal cost adjusted for inflation, or changes in the price of money.<br />

==Economic Costs==

==Economic Costs==

Economic costs are composed of accounting costs and the corresponding [[opportunity cost]]. These are the costs which matter in economic decisions and economic analysis.

Economic costs are composed of accounting costs and the corresponding [[opportunity cost]]. These are the costs which matter in economic decisions and economic analysis.

==Social Costs==

==Social Costs==

Social costs comprise private costs and the effect of any [[externality]] generated by the act of producing a good.

Social costs comprise private costs and the effect of any [[externality]] generated by the act of producing a good.