An example of an opportunity cost that is also an implicit cost is
A)a lease payment.
B)the cost of raw materials.
C)the value of the business owner's time.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

An opportunity cost is the cost of the next best alternative forgone when making a decision. An implicit cost is the opportunity cost that arises from the use of self-owned, self-employed, or unutilized resources. The value of the business owner's time is an example of an implicit cost because it is the value of the alternative activities the owner could be doing with their time instead of running the business. Lease payments and the cost of raw materials are explicit costs because they involve monetary payments to outside parties.

An Example of an Opportunity Cost That Is Also an Implicit