Explicit costs
A)Include only payments to labor.
B)Are the dollar payments made for the use of resources.
C)Include the market value of all resources used to produce a good.
D)Are the total value of resources used to produce a good but for which no monetary payment is made.

Question

Quizplus · Accepted Answer

Explicit costs are the dollar payments made for the use of resources in the production of goods or services. These costs are recorded in financial statements as expenses and are deducted from revenues to calculate profits. Explicit costs include the prices of raw materials, wages paid to labor, rent, utilities, advertising expenses, and other expenses that a business incurs in operating its regular activities.

Explicit Costs