Josh and Alex work as design engineers creating high‑end lighting fixtures. After one particularly enlightened afternoon, they decide to follow their dreams and open a cupcake bakery. Please classify their various costs.Supplies like sugar, butter, and baking traysAdvertising space taken out on a social networking siteThe salary Alex earned in his previous job designing light fixturesThe garage spaced used for baking that can no longer be rented out to a college studentThe money they pay their neighbor's six-year old son to deliver cupcakes to their customersImplicit costsNot a costExplicit costs

Implicit cost is the amount which is paid already but are not displayed in the books. It is…

Answered: Josh and Alex work as design engineers…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Josh and Alex work as design engineers creating high‑end lighting fixtures. After one particularly enlightened afternoon, they decide to follow their dreams and open a cupcake bakery. Please classify their various costs.

Supplies like sugar, butter, and baking trays
Advertising space taken out on a social networking site
The salary Alex earned in his previous job designing light fixtures
The garage spaced used for baking that can no longer be rented out to a college student
The money they pay their neighbor's six-year old son to deliver cupcakes to their customers

Implicit costs	Not a cost	Explicit costs

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