Which of the Following Is an Explicit Cost in Jim's

question 224

Multiple Choice

Which of the following is an explicit cost in Jim's business venture?

• A) the salary Jim could have earned at another job
• B) the interest Jim does not earn because he invested his savings in his business
• C) the wages Jim pays his workers
• D) Jim's normal profit
• E) Answers A, B, and D are correct.

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Definitions:

Work Effect

The impact on labor supply and productivity due to changes in economic policies or conditions.

Basic Assumption

An underlying principle or idea that is accepted as true without proof, forming the basis for further reasoning or behavior.

Level Of Investment

The amount of spending by businesses on capital goods, such as factories and machinery, which can influence economic growth.

Keynes

Refers to John Maynard Keynes, an economist famous for his ideas that in times of low demand, public sector investments are critical to economic stability and growth.