Asked by Tabitha Mooney on May 12, 2024
Verified
An example of an explicit cost of production would be the
A) cost of forgone labor earnings for an entrepreneur.
B) lost opportunity to invest in capital markets when the money is invested in one's business.
C) lease payments for the land on which a firm's factory stands.
D) value of the time the business could've spent producing something else.
Explicit Cost
Direct, out-of-pocket expenses incurred in the operation of a business, such as wages or rental payments.
Lease Payments
Regular payments made by a lessee to a lessor for the use of an asset.
- Identify the components of total costs in production.
Verified Answer
BW
Brynne WolfeMay 15, 2024
Final Answer :
C
Explanation :
Lease payments for the land on which a firm's factory stands are an explicit cost because they represent direct, out-of-pocket payments for the use of resources.
Learning Objectives
- Identify the components of total costs in production.