The time cost incurred by consumers who must find substitute products after a ban is placed on some good or service is an example of a(n)
A) capital cost
B) fixed cost
C) explicit cost
D) operating expense
E) implicit cost

Question

Quizplus · Accepted Answer

The time cost incurred by consumers is not an explicit cost (Choice C) as it is not a direct monetary payment. It is also not a capital cost (Choice A) or a fixed cost (Choice B), which are typically associated with the costs of production. It is not an operating expense (Choice D) as it is not a direct expense associated with running a business. The time cost incurred by consumers is an implicit cost (Choice E), which refers to the opportunity cost of using one's time for a particular activity. In this case, the time spent finding substitute products is time that could have been used for other activities.

The Time Cost Incurred by Consumers Who Must Find Substitute