Which of the following is an example of an implicit cost?
A)Interest paid on the firm's debt
B)Rent paid by the firm to lease office space
C)The owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm
D)Wages paid to workers

Question

Quizplus · Accepted Answer

Implicit costs are those that represent the opportunity costs of using resources owned by the firm for its current purposes rather than for the next best alternative use. Choice C, where the owner forgoes a salary from another job, is an example of an implicit cost because it represents the income the owner gives up to run the firm.

Which of the Following Is an Example of an Implicit