Which of the Following Is an Explicit Cost in Jim's

question 84

Multiple Choice

Which of the following is an explicit cost in Jim's business venture?

• A) The interest Jim does not earn because he invested his savings in his business.
• B) Jim's normal profit.
• C) The salary Jim could have earned at another job.
• D) The wages Jim pays his workers.
• E) Answers A, B and D are correct.

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Definitions:

Wage Rate

The amount of money paid to workers per unit of time, often hourly or monthly, for their labor.

MRP

Marginal Revenue Product, the additional revenue generated from using one more unit of a factor of production.

Rent

Payment made periodically by a tenant to a landlord in exchange for the use of land, a building, or another property.

MRP

The additional revenue produced by increasing one unit of a production input, emphasizing the productivity aspect in revenue generation.