Implicit Costs Are

question 379

Multiple Choice

Implicit costs are

• A) the costs of using factors that a producer hires or rents.
• B) the opportunity costs of using factors that a producer does not buy or hire but already owns.
• C) costs that are taken into consideration by accountants.
• D) costs that are variable in the short run and fixed in the long run.

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Definitions:

Gross Working Capital

The total of all current assets of a company, indicating the liquid assets available for running day-to-day operations.

Current Assets

Assets of a company that are expected to be sold, consumed, or converted into cash typically within one year or one operating cycle, whichever is longer.

Operations

The day-to-day activities involved in managing and running a business or organization efficiently.

Total Cost

The complete cost of producing or acquiring goods or services, including direct, indirect, fixed, and variable expenses.