The Difference Between Explicit Costs and Implicit Costs

question 355

Multiple Choice

The difference between explicit costs and implicit costs

• A) is that explicit costs are opportunity costs while implicit costs are not.
• B) is that implicit costs are opportunity costs while explicit costs are not.
• C) is that explicit costs are short-run costs and implicit costs are long-run costs.
• D) is that explicit costs involve resources that are purchased and implicit costs involve resources the firm already owns.

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Definitions:

Equilibrium

A state in a market or economy where supply equals demand, and there is no incentive for change under current conditions.

Coconuts

Often used in economic models and examples, referring to a simplistic commodity to illustrate principles of trade, investment, or resource allocation.

Equilibrium

A condition or state in which economic forces such as supply and demand are balanced, resulting in a stable market.

Coconuts

A large tropical fruit with a hard shell, edible white flesh, and clear liquid, often used in food and drink preparations.