Payment by a firm to hire a worker is an example of a(n)
A)Implicit cost
B)Explicit cost
C)Opportunity cost
D)Total cost
E)Marginal cost

Question

Quizplus · Accepted Answer

Explicit costs refer to the actual expenses incurred by a firm in order to produce goods or services, such as wages paid to workers. Implicit costs, on the other hand, refer to the opportunity costs of using resources that a firm already owns for a particular activity. Opportunity costs are the value of the next best alternative foregone, and total cost includes both explicit and implicit costs. Marginal cost is the additional cost incurred from producing one additional unit of output.

Payment by a Firm to Hire a Worker Is an Example