Refer to the accompanying scenario to answer the following questions:
Dave's Batting Cages is located in Boston, Massachusetts. During the first year of operation, Dave's Batting Cages incurred many costs. In that year, Dave spent $5,000 on labor, $2,000 on maintenance, and $1,000 on electricity. Dave took out a loan to open his business, in which he would have earned $1,500. His previous job, which he could get back at any time, paid him $50,000.
-Dave's Batting Cages incurred ________ in implicit costs.
A) $9,500
B) $7,000
C) $51,500
D) $8,000
E) $50,000

Question

Quizplus · Accepted Answer

Implicit costs include the opportunity costs of the owner's time and resources. Dave's implicit costs are the $50,000 salary he foregoes and the $1,500 interest he could have earned, totaling $51,500.

Refer to the Accompanying Scenario to Answer the Following Questions