An Example of an Explicit Cost of Production Would Be

question 51

Multiple Choice

An example of an explicit cost of production would be the

• A)cost of forgone labor earnings for an entrepreneur.
• B)lost opportunity to invest in capital markets when the money is invested in one's business.
• C)lease payments for the land on which a firm's factory stands.
• D)value of the time the business could've spent producing something else.

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Definitions:

Controlling Influence

The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, often through ownership or agreement.

Equity Securities

Equity Securities are financial instruments that represent ownership interest in a company, such as stocks, entitling the holder to a share of the entity's profits and assets.

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns.

Long-Term Investments-AFS

These are long-term investments in 'Available for Sale Securities' that a company has, which can be sold in the future.