Which of the Following Is an Example of an Implicit

question 259

Multiple Choice

Which of the following is an example of an implicit cost?

• A) wages paid to employees
• B) interest paid to a bank on a building loan
• C) the cost of using capital an owner donates to the business
• D) dollars paid to a supplier for materials used in production
• E) liability insurance payments made only once a year

Analyze the effects of changes in prices and income on a consumer's budget constraint.

Understand and calculate the optimum choice of goods for a consumer given their preferences and prices.

Interpret the slope of a consumer's budget constraint and its economic significance.

Explain the conditions under which indifference curves can have atypical shapes and what these shapes indicate about consumer preferences.