An Explicit Cost Is

question 100

Multiple Choice

An explicit cost is:

• A) an opportunity cost for which payment is not required.
• B) an out-of-pocket expense.
• C) always larger than an associated implicit cost.
• D) both (a) and (b)

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Definitions:

Risk Preferences

The degree of variability in outcomes that an individual or entity is willing to accept in pursuit of a goal, often associated with investments.

Total Utility

The total satisfaction or benefit received from consuming a particular quantity of goods or services.

Risk Preferences

Individuals' or entities' varying tolerance for risk, influencing their decision-making in uncertain situations.

Utility

A measure of satisfaction or happiness that a consumer gains from consuming a good or service.