Question

Input costs that require an outlay of money by the firm are called _______ costs while input costs that do not require an outlay of money by the firm are called _______ costs.

Answer 1

Answer: Explicit costs , Implicit cost.

Explicit Costs is an Input costs that require an outlay of money by the firm. e.g (Paying for supplies, paying workers).

Implicit Costs is an Input costs that do not require outlay of money by the firm. e.g (Could be working somewhere else and making money but giving up the money you could be making because of where you work now).