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:

Liability

The state of being legally responsible for something, particularly for debts or legal obligations.

Act of God

Natural events outside of human control, such as hurricanes, earthquakes, or floods, which are not caused by and cannot be prevented by humans.

Garage

A building or secured area designed for the storage and maintenance of vehicles.

Shed

A small building, typically made of wood or metal, used for storage or as a workshop, commonly found in gardens or backyards.