Accounting costs and economic costs differ because
A)Accounting costs exceed economic costs whenever any factor is not paid an explicit wage.
B)Accounting costs include implicit costs,and economic costs do not.
C)Economic costs include the opportunity costs of all resources used,while accounting costs include actual dollar outlays.

Question

Quizplus · Accepted Answer

Accounting costs only include explicit, out-of-pocket expenses while economic costs include both explicit and implicit costs such as opportunity costs. Accounting costs are often used for financial reporting purposes, while economic costs are used for analyzing the true cost of decision making. Therefore, option C is the correct answer.

Accounting Costs and Economic Costs Differ Because