Which of the following would be categorized as an implicit cost?
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above

Question

Which of the following would be categorized as an implicit cost? 
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above

Quizplus · Accepted Answer

Implicit costs refer to the opportunity costs of using resources that could have been employed elsewhere. In this case, not being able to spend your $10,000 savings if you invest it in your business is an implicit cost, as it represents the foregone opportunity to use that money elsewhere.

Which of the Following Would Be Categorized as an Implicit