Explicit costs are _____
A)not part of opportunity costs.
B)the only costs considered in opportunity costs.
C)exactly the same as implicit costs.
D)actual cash payments for resources purchased.
E)the opportunity costs of using resources owned by the firm.

Question

Quizplus · Accepted Answer

Explicit costs refer to the actual cash payments made by the firm for the resources it uses, such as wages paid to employees or rent paid for a building. These costs are not the same as implicit costs, which refer to the opportunity costs of using resources owned by the firm, or the next best alternative use of those resources. Explicit costs are part of the total opportunity cost of producing a good or service, but they do not include all opportunity costs, as implicit costs must also be considered.

Explicit Costs Are _____