Explicit costs:
A) Include only payments to labor.
B) Are the sum of actual monetary payments made for resources used to produce a good.
C) Include the market value of all resources used to produce a good.
D) Are the total value of resources used to produce a good but for which no monetary payment is actually made.

Question

Quizplus · Accepted Answer

Explicit costs are the actual payments made for all resources used to produce a good or service. This includes payments to labor, rent, materials, and any other expenses that require a direct monetary payment. It does not include any resources for which no monetary payment is made, such as owner's time or the opportunity cost of using capital. Therefore, choice B is the correct answer.

Explicit Costs