Which would be an implicit cost for a firm? The cost of: A. Property insurance B. Property tax C. Raw materials D. Wages foregone by the owner of the firm
Which would be an implicit cost for a firm? The cost of: A. Property insurance B. Property tax C. Raw materials D. Wages foregone by the owner of the firm
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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18. Which would be an implicit cost for a firm? The cost of:
A. Property insurance
B. Property tax
C. Raw materials
D. Wages foregone by the owner of the firm
Expert Solution
Step 1
Implicit costs:
The implicit cost refers to the opportunity cost of producing a particular commodity over another one. Implicit cost also involves the cost of spending time and effort on the production of a good and forgoing another. This is a concept of economic cost and not included the accounting cost of production.
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