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.
Refer to the information given above.Pat's explicit cost is _____ and Pat's implicit cost is ______.
A)$16,000;$51,000
B)$15,000;$36,000
C)$16,000;$35,000
D)$35,000;$16,000

Question

Quizplus · Accepted Answer

Explicit costs are rent,advertising and equipment: 12,000 + 1,000 + 3,000 = 16,000.Pat's implicit cost is Pat's former salary of $35,000.

Pat Used to Work as an Aerobics Instructor at the Local