Implicit costs are nonexpenditure costs, meaning they are not actual cash payments made by the firm for resources but rather the opportunity cost of using the resources for another purpose. Examples of implicit costs include the opportunity cost of the owner's time and the loss of potential income from investing the owner's resources elsewhere.

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Implicit Costs Are

Question 28

Multiple Choice

Implicit costs are:

A) regarded as costs by accountants but not by economists.
B) payments that a firm makes to other firms or individuals who supply resources to it.
C) nonexpenditure costs.
D) costs that vary proportionately with output.

Correct Answer: