Question

To an economist, the economic costs associated with the use of resources include rev: 06_26_2018 Multiple Choice explicit, but not implicit, costs. neither implicit nor explicit costs. explicit and implicit costs. implicit, but not explicit, costs.

Answer 1

Answer:

Explicit and Implicit costs

Explanation:

For an economist the definition of profit differs and so does the definition of cost.

Economists takes into account the implicit costs or also called the opportunity costs of an investment or the use of resources. This opportunity cost is the profitability that can be generated with the alternative use of the said resources. While accounting profit only accounts for explicit costs like material and labor, for an economist profits would be as follows,

Economic Profit = Explicit direct costs + Opportunity Costs/Implicit costs

Hope that helps.