Which of the Following Are Implicit Costs for a Typical

question 23

Multiple Choice

Which of the following are implicit costs for a typical firm?

• A)the cost of labor
• B)the opportunity cost of capital owned and used by the firm
• C)the cost of energy used in production
• D)a business licensing fee

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Definitions:

Put Option

A financial contract allowing the holder to sell a stock, bond, commodity, or other asset at a specified price within a certain period.

Writer

In finance, it refers to the seller of an option contract, who is obligated to buy or sell the underlying asset if the option is exercised.

Premium

The amount by which the price of a security or insurance policy exceeds its par or face value or the cost of acquiring an option or futures contract.

Strike Price

The predetermined price at which an option can be exercised, either to buy or sell the underlying asset.