Implicit costs
A) Include only payments to labor.
B) Are the sum of actual monetary payments made for resources used to produce a good.
C) Include the value of all resources used to produce a good.
D) Are the value of resources used to produce a good but for which no monetary payment is made.

Question

Quizplus · Accepted Answer

Implicit costs include the value of resources used to produce a good but for which no monetary payment is made, such as the opportunity cost of using an owner's time, the use of someone's personal vehicle, and the use of personal funds for a business expense. It is important to consider implicit costs in addition to explicit costs (monetary payments) when calculating the total cost of production. Choices A, B, and C do not accurately describe implicit costs.

Implicit Costs