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:

Consumption Function

A representation in economics indicating the relationship between total consumer expenditures and household income levels.

Interest Rate

The cost of borrowing money or the return on savings, expressed as a percentage, influencing economic activity by affecting spending and investment decisions.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, indicating how changes in income affect spending.

Saving

The portion of income not spent on current expenditures or consumption, often put aside for future use or investment.