Which of the Following Is an Example of an Implicit

question 108

Multiple Choice

Which of the following is an example of an implicit cost of production?

• A) the income an entrepreneur could have earned working for someone else
• B) the cost of labour for a farmer who tills his fields
• C) the income of a labourer in a factory that assembles DVD players
• D) the cost of raw materials used to produce bread in a bakery

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Definitions:

Return on Assets Ratio

A financial ratio indicating how Profitable a company is relative to its total assets, measuring how efficiently a company is using its assets to generate profit.

Net Profit Margin Ratio

A financial metric that shows the percentage of net income to sales revenue, indicating how much profit each dollar of sales generates.

Total Asset Turnover Ratio

An economic indicator that evaluates how effectively a business utilizes its assets to produce sales income.

Return on Assets Ratio

A financial metric indicating how profitable a company is relative to its total assets, calculated by dividing net income by total assets.