The choice of method of production where more than one method is possible. A technique is a set of inputs capable of producing a given output or set of outputs. If more than one set of inputs can produce the outputs, a choice of techniques must be made. A profit-maximizing firm prefers the technique for which the total cost of inputs is lowest. If some costs are sunk, for example buying long-lasting machines, choice of technique has to take account of expected input prices over the whole useful life of the machines. If the desired level of output is fixed, it pays to minimize costs for that output. If the desired level of output is uncertain, as is likely over a prolonged period, the chosen technique may have costs higher than the minimum possible for the expected most likely output, but more flexibility, so that costs are kept down when output is well above or below the average expected level.

• base rate
• base-weighted index
• base year
• basic rate
• basis point
• batch production
• Bayesian statistics
• BBB
• BCCI
• BEA
• bear
• bearer bond
• bearer security
• bear market
• before-tax income
• beggar-my-neighbour policy
• behavioural theories of the firm
• bell curve
• below-the-line
• benefit
• benefit-cost analysis
• benefit principle
• benefits
• benefits in kind
• benefits system