Economic cost
A)Includes both implicit and explicit costs.
B)Is the sum of actual monetary payments made for resources used to produce a good.
C)Includes only implicit costs.
D)Decreases as the level of production increases.

Question

Quizplus · Accepted Answer

Economic cost includes both implicit and explicit costs, which means it takes into account the actual monetary payments made for resources used to produce a good as well as the opportunity cost of using those resources in an alternative way. Therefore, option A is the correct choice. Option B only considers explicit costs, while option C is incorrect because it only includes implicit costs. Option D is also incorrect because economic cost can increase or decrease as the level of production changes, depending on the cost structure of the production process.

Economic Cost