Which of the following would be an example of an implicit cost? (i)
Forgone investment opportunities
(ii)
Wages of workers
(iii)
Raw materials costs
A)(i) only
B)(ii) only
C)(ii) and (iii) only
D)(i) and (iii) only

Question

Quizplus · Accepted Answer

An implicit cost is a cost that is not easily observable or recorded in accounting statements. Forgone investment opportunities are an example of implicit costs because they are the opportunities that a business had to give up in order to pursue the chosen investment. Wages of workers and raw materials costs are both explicit costs, which are costs that can easily be observed and recorded in accounting statements.

Which of the Following Would Be an Example of an Implicit