When Calculating Total Production Costs, What Kind of Cost Is

question 41

Multiple Choice

When calculating total production costs, what kind of cost is the crucial difference between how economists and accountants analyze the profitability of a business?

• A) sunk costs
• B) explicit costs
• C) implicit costs
• D) cash payments

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Definitions:

Expiration Date

The last day on which an option or derivative contract is valid, after which it either becomes worthless or is automatically settled.

American Put Option

A derivative security that gives the holder the right, but not the obligation, to sell a specified quantity of an underlying asset at a set price within a specified time.

Striking Price

The specified price at which the holder of an option can buy (call option) or sell (put option) the underlying asset.

Expiration Date

The specific date on which an options contract or other financial instrument becomes void and the rights under it cease to exist.