Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's
A)total revenue.
B)explicit costs.
C)implicit costs.
D)marginal costs.

Question

Quizplus · Accepted Answer

The $5,000 that Bubba gave up by not working as a fishing tour guide is considered an opportunity cost of running his shrimp business. In economic terms, this is counted as part of the business's implicit costs, which are the costs associated with the entrepreneur's resources used in the business.

Bubba Is a Shrimp Fisherman Who Could Earn $5,000 as a Fishing