Economists Consider Both Explicit and Implicit Costs When Measuring Economic

question 96

Multiple Choice

Economists consider both explicit and implicit costs when measuring economic profit.The reason they consider implicit costs is that:

• A) they are more conservative than accountants, who consider only costs that are out-of-pocket.
• B) most businesses forget to pay their implicit costs.
• C) a business must cover its opportunity costs as well as its out-of-pocket expenses to be truly profitable.
• D) implicit costs are typically far larger than explicit costs.
• E) implicit costs include expenses like taxes and fees to the government.

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