The full opportunity costs of production are calculated as the sum of both explicit and implicit costs.

Question

Quizplus · Accepted Answer

This statement is true. Explicit costs are the actual out-of-pocket expenses incurred in the production process, while implicit costs are the opportunity costs of resources already owned by the firm or provided by the owners. The sum of both gives the total cost of production, including all foregone opportunities.

The Full Opportunity Costs of Production Are Calculated as the Sum