Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment. Pat's explicit costs are ________, and Pat's implicit costs are ________.
A)$16,000; $51,000
B)$15,000; $36,000
C)$16,000; $35,000
D)$35,000; $16,000

Question

Quizplus · Accepted Answer

Pat's explicit costs are Pat's expenditures on rent, advertising and equipment: $12,000 + $1,000 + $3,000 = $16,000. Pat's implicit costs are Pat's foregone earnings as an aerobics instructor: $35,000.

Pat Used to Work as an Aerobics Instructor at the Local