Implicit costs are:
A) the opportunity costs of using resources owned by the entrepreneur in his/her own business.
B) payments the business owner must make on borrowed funds.
C) costs which vary as the level of output varies.
D) those payments the business owner makes in cash.

Question

Quizplus · Accepted Answer

Implicit costs refer to the opportunity costs of using resources owned by the entrepreneur in his/her own business. These costs may not involve actual cash payments, but rather the foregone income or benefits that could have been earned if the resources were used in another way. Option B refers to explicit costs, option C refers to variable costs, and option D refers to out-of-pocket costs.

Implicit Costs Are