What is the principle distinction between explicit costs and implicit? costs?
A. There is no real difference between explicit and implicit costs.
B. Implicit costs are usually larger than explicit costs.
C. Implicit costs must be paid immediately, but explicit costs need to be paid only in the long run.
D. Explicit costs are direct, out-of-pocket payments, while implicit costs are all foregone opportunity costs
Answer: D. Explicit costs are direct, out-of-pocket payments, while implicit costs are all foregone opportunity costs
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An example of a factor of production is
A) a bottle of wine produced by a vineyard. B) the wine exported by a vineyard. C) a vintner hired by a vineyard. D) a loan granted to a vineyard.
The Keynesian consumption function does not display consumption smoothing, because ________
A) the average propensity to consume rises with income B) the marginal propensity to consume is constant C) consumption is not affected by the real interest rate D) consumption is not affected by future income
Which of the following categories accounted for the third largest percentage of total federal government expenditures?
a. Education and health. b. National defense. c. Income security. d. Interest on the national debt.
The current share price of a corporation's stock is determined by the:
A. original purchase price multiplied by 1 plus the interest rate. B. present value of capital gains and dividends received by stock owners. C. expected interest and dividend payments. D. expected capital gains and dividends prospective buyers will earn.