Identify the implicit cost and explicit cost.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(b)

To determine

Identify the implicit cost and explicit cost.

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(c)

To determine

Identify the implicit cost and explicit cost.

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(d)

To determine

Identify the implicit cost and explicit cost.

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(e)

To determine

Identify the implicit cost and explicit cost.

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(f)

To determine

Identify the implicit cost and explicit cost.

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 18 percent interest per year or to buy a year-old llama, send it onto the commons to graze, and sell it after 1 year. The price the villager gets for the 2-year-old llama depends on the quality of the fleece It grows while grazing on the commons. That in turn depends on the animal's access to grazing, which depends on the number of llamas sent to the commons, as shown in the following table: Number of 11amas on the commons Price per 2- year-old 11ama ($) 1 125 2 119 3 116 4 113 5 6 111 109 The villagers make their investment decisions one after another, and their decisions are public. a. If each villager decides Individually how to Invest, how many llamas will be sent onto the commons, and what will be the resulting village Income? Number of llamas: [ 20 Instructions: Enter your response as a whole number. Village Income: $ 110 b. What is…

5. Discrimination in the labor market The following table exhibits the name, gender, height, and minimum wage 10 people are willing to accept to work as travel nurses at a regional hospital. Name Gender Height Minimum Wage (Inches) (Dollars per week) Cho F 65 $297 Frances F 64 $316 Latasha F 68 $336 Dmitri M 70 $355 Jake M 71 $374 Rosa F 65 $393 Nick M 72 $420 Brian M 71 $439 Tim M 66 $451 Alyssa F 68 $478 The lowest weekly wage that the hospital can spend in order to hire five travel nurses is ________. Suppose the hiring director of the hospital prefers taller candidates because they think it will increase revenue, and so they impose a requirement that all newly hired travel nurses must have a height of at least 68 inches. With this mandate in place, the weekly wage rate the hospital now must pay in order to hire five travel nurses increases by ________.

5. Discrimination in the labor market The following table exhibits the name, gender, height, and minimum wage 10 people are willing to accept to work as human resource specialists at a large financial firm. Name Gender Height Minimum Wage (Inches) (Dollars per week) Paolo M 67 $298 Ginny F 63 $311 Lucia F 66 $332 Eric M 71 $354 Kenji M 69 $375 Sharon F 66 $397 Paolo M 70 $411 Carlos M 70 $440 Van M 64 $452 Amy F 69 $474 The lowest weekly wage that the financial firm can spend in order to hire five human resource specialists is____. Suppose the hiring director of the financial firm prefers taller candidates because they think it will increase revenue, and so they impose a requirement that all newly hired human resource specialists must have a height of at least 67 inches. With this mandate in place, the weekly wage rate the financial firm now must pay in order to hire five human resource specialists increases by_____.

Answer 2

Question

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(b)

To determine

Identify the implicit cost and explicit cost.

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(c)

To determine

Identify the implicit cost and explicit cost.

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(d)

To determine

Identify the implicit cost and explicit cost.

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(e)

To determine

Identify the implicit cost and explicit cost.

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(f)

To determine

Identify the implicit cost and explicit cost.

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(b)

To determine

Identify the implicit cost and explicit cost.

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(c)

To determine

Identify the implicit cost and explicit cost.

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(d)

To determine

Identify the implicit cost and explicit cost.

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(e)

To determine

Identify the implicit cost and explicit cost.

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(f)

To determine

Identify the implicit cost and explicit cost.

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(b)

To determine

Identify the implicit cost and explicit cost.

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(c)

To determine

Identify the implicit cost and explicit cost.

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(d)

To determine

Identify the implicit cost and explicit cost.

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(e)

To determine

Identify the implicit cost and explicit cost.

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(f)

To determine

Identify the implicit cost and explicit cost.

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(b)

To determine

Identify the implicit cost and explicit cost.

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(c)

To determine

Identify the implicit cost and explicit cost.

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(d)

To determine

Identify the implicit cost and explicit cost.

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

(e)

To determine

Identify the implicit cost and explicit cost.

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

(f)

To determine

Identify the implicit cost and explicit cost.

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Answer 6

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

Answer 7

Chapter 6, Problem 1SQP

(a)

To determine

Identify the implicit cost and explicit cost.

Answer 8

(a)

Expert Solution

Explanation of Solution

Manager’s salary is an explicit cost because salary is a direct cost that is involved in the process of running a business.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

Answer 13

(b)

To determine

Identify the implicit cost and explicit cost.

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

Answer 14

(b)

To determine

Identify the implicit cost and explicit cost.

Answer 15

(b)

Expert Solution

Explanation of Solution

Payment to Dell for computers is an explicit cost because this cost involves in spending money.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

Answer 20

(c)

To determine

Identify the implicit cost and explicit cost.

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Answer 21

(c)

To determine

Identify the implicit cost and explicit cost.

Answer 22

(c)

Expert Solution

Explanation of Solution

Salary forgone by the owner of a firm by operating his or her own company is an implicit cost because the person gives up his work in order to start his own business. Since the salary is given up for benefit, it is an implicit cost.

Answer 23

(c)

Expert Solution

Answer 24

(c)

Expert Solution

Answer 25

Expert Solution

Answer 26

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Answer 27

(d)

To determine

Identify the implicit cost and explicit cost.

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Answer 28

(d)

To determine

Identify the implicit cost and explicit cost.

Answer 29

(d)

Expert Solution

Explanation of Solution

Interest forgone on a loan that an owner makes to his or her own company is an implicit cost because the person would earn the interest payment if he lent the amount outside the business. Thus, he has given up his interest rate.

Answer 30

(d)

Expert Solution

Answer 31

(d)

Expert Solution

Answer 32

Expert Solution

Answer 33

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Answer 34

(e)

To determine

Identify the implicit cost and explicit cost.

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

Answer 35

(e)

To determine

Identify the implicit cost and explicit cost.

Answer 36

(e)

Expert Solution

Explanation of Solution

Medical insurance payment that a company makes for its employees is an explicit cost because it involves spending the money directly.

Answer 37

(e)

Expert Solution

Answer 38

(e)

Expert Solution

Answer 39

Expert Solution

Answer 40

Economics Concept Introduction

Explicit cost: Explicit cost refers to a direct cost incurred by the firm to others in the process of running a business such as wages, rents, materials, and so on. Thus, fixed cost and variable cost are included in the explicit cost.

Answer 41

(f)

To determine

Identify the implicit cost and explicit cost.

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.

Answer 42

(f)

To determine

Identify the implicit cost and explicit cost.

Answer 43

(f)

Expert Solution

Explanation of Solution

Income forgone while going to college is an implicit cost because the person has given up his income for going to college. Thus, there is a fall in the opportunity cost.

Answer 44

(f)

Expert Solution

Answer 45

(f)

Expert Solution

Answer 46

Expert Solution

Answer 47

Economics Concept Introduction

Implicit costs: Implicit cost refers to the costs that have previously been incurred but are not initially shown as a separate expenditure. It denotes an opportunity cost that arises when a firm allocates internal resources.