The money the North Korean government spent to purchase a closed British brewery was a(n) ________ cost, and the choice to brew beer in this brewery instead of using the resources to feed the people of North Korea is a(n) ________ cost.

Question

Quizplus · Accepted Answer

The money spent to purchase the brewery is an explicit cost because it is a direct, out-of-pocket payment. The choice to brew beer instead of using resources to feed the people represents an implicit cost, which is an opportunity cost involving the foregone benefits of the next best alternative.

The Money the North Korean Government Spent to Purchase a Closed