Which of the Following Is Most Likely to Be an Implicit

question 119

Multiple Choice

Which of the following is most likely to be an implicit cost of production?

• A) the "competitive rate" salary the owner of the business pays herself for services provided
• B) the property taxes on a building owned by the firm
• C) the rental income foregone because the business owns its building
• D) the interest paid on outstanding loans of the business

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Definitions:

Liquidated Damages

Predetermined damages agreed upon by the parties in a contract to be paid if a specific breach occurs, as compensation not as a penalty.

Incidental Damages

Compensation for secondary or unforeseen losses resulting from a breach of contract.

Contract Remedies

Legal actions or measures that a court can order to enforce a contract, compensate for breach, or protect a party's rights under a contract.

Monetary Damages

Financial compensation awarded to a party in a lawsuit for losses or injuries suffered as a result of the defendant's actions.