Which of the Following Is an Implicit Cost

question 13

Multiple Choice

Which of the following is an implicit cost?

• A)salaries paid to owners who work for their own firm
• B)interest on money borrowed to finance equipment purchases
• C)cash payments for raw materials
• D)wages paid to hourly employees
• E)foregone interest on money taken from bank accounts to buy equipment

Understand how economic policies like price controls can impact supply and demand, and potentially lead to shortages.

Grasp the relationship between demand, supply, and employment.

Recognize the role of factors of production in determining supply of goods and services.

Understand the impact of economic growth on job opportunities, wages, and standard of living.

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Definitions:

Guaranteed Residual Value

The estimated value that a leased asset will have at the end of the lease term, as guaranteed by the lessee or a third party.

Implicit Lease Rate

The interest rate embedded in a lease contract, used to calculate lease payments.

Off-Balance Sheet Leases

Leasing arrangements that do not appear on a company's balance sheet as an asset or liability, often used to keep the debt-to-equity ratio low.

Income Statement

A report that outlines a company's financial results, including income, expenses, and profits, during a particular period of accounting.