Which of the Following Items Is Most Likely to Be

question 129

Multiple Choice

Which of the following items 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) property taxes on a building owned by the firm
• C) rental payments for a building utilized by the company and rented from another party
• D) the interest income foregone on the equity capital invested by owners

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Definitions:

Creditors

Creditors are individuals or entities that are owed money by another entity or individual, known as a debtor.

Debtor

A person, company, or country that owes money.

Surety

A surety involves a third party agreeing to take on the obligation of paying back a debt or performing a duty if the primary obligor fails to do so.

Creditor

A person or entity to whom money is owed by another entity, known as the debtor, for goods, services, or loans provided.