What Is an Explicit Cost

question 145

Multiple Choice

What is an explicit cost?

• A)A cost that is actually paid out in money.
• B)A cost that is not actually paid out in money.
• C)A historical cost of buying equipment for production that has no current resale value.
• D)The annual cost of any asset that is expected to be in use for more than a year.

Comprehend the legal ramifications of goods delivery through common carriers and the role of FOB (Free On Board) and CIF (Cost, Insurance, and Freight) terms in determining responsibilities for shipping costs and risk of loss.

Identify and analyze the legal rights and obligations of buyers and sellers in conditions of nonconforming goods, including the options available to buyers.

Interpret the impact of good-faith purchase and void, voidable, and good titles in transactions involving stolen or accidentally sold goods.

Examine the significance of shipping terms like FAS (Free Alongside Ship) and their implications for risk and cost allocation between buyers and sellers.

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Definitions:

Marginal Cost

The additional cost incurred by producing one more unit of a product.

Rent-seeking

It involves seeking to increase one's share of existing wealth without creating new wealth, often through manipulation or exploitation of the economic environment.

Public Choice Theory

An economic theory that applies principles of economics to analyze political behavior and decision-making.

Government Failure

Occurs when the government becomes the tool of the rent seeker and the allocation of resources is made even less efficient by the intervention of government.