Implicit costs are the opportunity costs of using resources that a company already owns. They represent the potential income lost by not using those resources in the next best alternative way. Unlike explicit costs, which are direct, out-of-pocket payments for resources, implicit costs are not directly paid out nor always easily quantifiable in dollar terms.

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Implicit Costs Are

Question 12

Multiple Choice

Implicit costs are

A) the opportunity cost of the means of production.
B) always paid out of pocket.
C) never greater than explicit costs.
D) always greater than explicit costs.
E) not measured in terms of dollars.

Correct Answer: