Which of the Following Is an Implicit Cost

question 56

Multiple Choice

Which of the following is an implicit cost?
i.wages paid to workers
ii.the normal profit
iii.the electric bill

• A) i only
• B) ii only
• C) i and ii
• D) ii and iii
• E) Neither i, ii, nor iii

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Definitions:

Risk-Free Asset

An investment perceived to have no risk of financial loss, often exemplified by government bonds.

Expected Return

The anticipated return on an investment based on the probabilities of various outcomes, factoring in both potential gains and losses.

Correlation Coefficient

A numerical metric that determines the intensity and orientation of a straight-line association between two factors.

Covariance

A measure of how two random variables change together, indicating the direction of their linear relationship.