Economic costs include implicit costs but not explicit costs.

Question

Quizplus · Accepted Answer

Economic costs include both implicit and explicit costs. Explicit costs refer to out-of-pocket expenses, such as wages, rent, and materials. Implicit costs refer to the opportunity cost of using resources for one purpose instead of another, such as lost potential earnings from performing a different job or investment. Both explicit and implicit costs are taken into account to determine economic costs.

Economic Costs Include Implicit Costs but Not Explicit Costs