Economists Consider Both Explicit Costs and Implicit Costs When Measuring

question 25

Multiple Choice

Economists consider both explicit costs 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 accounting costs.
• 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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Definitions:

Research Finding

The outcome or results derived from systematic investigation or study in a specific area of knowledge or inquiry.

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation.

Sociological Theories

The comprehensive ideas and propositions that describe, explain, and predict various aspects of society and social behavior, guiding sociological research and understanding.

Deductive Reasoning

A logical process where a conclusion is based on the concordance of multiple premises that are generally assumed to be true.