An example of an opportunity cost not measured in the accounting costs of a business firm is
A) payment for the cost of raw materials.
B) wages paid to labor.
C) labor services provided by the firm's owner without reimbursement.
D) electric utility expense.
E) marketing costs that had little payoff.

Question

Quizplus · Accepted Answer

The opportunity cost of labor services provided by the firm's owner without reimbursement is not measured in the accounting costs of a business firm. This is because the owner's labor services do not involve any monetary outflow, and therefore, are not included in the accounting costs. However, the owner could have used this time to earn money from another job or business, and this potential income forgone is the opportunity cost, which is not reflected in the accounting costs.

An Example of an Opportunity Cost Not Measured in the Accounting