Economic costs
A) include both a normal rate of return on investment and the opportunity cost of each factor of production.
B) are equal to the direct costs of hiring all factors of production.
C) are the opportunity cost of each factor of production minus any interest charges paid on borrowed funds.
D) are equal to total revenue minus accounting profit.

Question

Quizplus · Accepted Answer

Economic costs include both the explicit costs of hiring factors of production and the implicit costs, such as the opportunity cost of using resources in one way instead of another, plus a normal rate of return on investment.

Economic Costs