nd Production: 1 stude Consider Alyssa, are explicit costs and which are implici

Question

nd Production: 1 stude Consider Alyssa, are explicit costs and which are implicit costs? who runs a business selling steak knives door to door. This business has many types of costs. Which of the following Items (5 items) (Drag and drop into the appropriate area below) tax payments interest salary given up from another job to run this business wages paid to employees electricity bil income Categories Explicit costs Implicit costs Drag and drop here Drag and drop here VIEW SOLUTION 08/11> 6 OF 11 QUESTIONS COMPLETED

Explanation / Answer

Answer :- Explicit costs are the actual cost incurred by business in running its day-to-day operations.  

Implicit costs are the opportunity cost i.e., The value of second best (or next best) alternative foregone for running the business.

Explicit costs Tax payments, Wages paid to employees and Electricity bill. Implicit costs Lost interest income, Salary given up from another job to run this business.

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