The costs of a business owner's factors of production that could be used in alternative income-earning activities:
A) are implicit costs.
B) are opportunity costs to the owner.
C) must be recovered if the owner is to keep the business in operation.
D) all of the above.

Question

Quizplus · Accepted Answer

All of the choices correctly describe the costs of a business owner's factors of production that could be used in alternative income-earning activities. They are considered implicit costs because they represent the foregone opportunities that the owner incurs by allocating resources to the current business. These are also opportunity costs, as they represent the value of the best alternative use of the resources. Lastly, these costs must be recovered for the business to remain viable, as they represent real economic sacrifices the owner is making.

The Costs of a Business Owner's Factors of Production That