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

Quizplus · Accepted Answer

Implicit costs are opportunity costs of using resources the entrepreneur already owns. In option A, not being able to spend $10,000 savings is an opportunity cost that the entrepreneur incurs by investing the money in their business. In options B and C, the costs are explicit costs (out-of-pocket expenses). Therefore, only option A is categorized as an implicit cost.

Which of the Following Would Be Categorized as an Implicit