The choices listed below involve costs to the firm. For which is the implicit cost potentially different than its explicit cost?
A) The use of firm- owned assets.
B) The use of rented land.
C) The services of hired workers.
D) The purchase of raw materials used in production.
E) The interest paid on borrowed money.

Question

Quizplus · Accepted Answer

Implicit costs refer to the opportunity costs of using resources owned by the firm, such as firm-owned assets, which do not involve direct monetary payment. This is different from explicit costs, which involve direct monetary payments, such as renting land or hiring workers.

The Choices Listed Below Involve Costs to the Firm