The Choices Listed Below Involve Costs to the Firm

question 91

Multiple Choice

The choices listed below involve costs to the firm. For which is the implicit cost potentially different than its explicit cost?

• A) The use of firm- owned assets.
• B) The use of rented land.
• C) The services of hired workers.
• D) The purchase of raw materials used in production.
• E) The interest paid on borrowed money.

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Definitions:

Open Ocean

The vast, deep waters of the world ocean, lying beyond the continental shelves and characterized by a wide variety of marine species and ecosystems.

Nonrenewable Natural Resources

Natural resources such as coal, oil, and natural gas that cannot be replenished within a human lifespan once consumed.

Fixed Supply

A scenario where the quantity of a good or resource available does not change in response to changes in price.

Property Rights

The entitlement to control, benefit from, and transfer ownership of resources including land, tangible goods, and creations of intellect.