Money that must be paid for the use of factors of production such as labor and capital is an:

A) explicit cost.
B) accounting profit.
C) implicit cost.
D) economic profit.

Question

Money that must be paid for the use of factors of production such as labor and capital is an:A) explicit cost.B) accounting profit.C) implicit cost.D) economic profit.

Aubre Nicole · Accepted Answer

Final Answer : A, Explanation :  The money paid for the use of factors of production such as labor and capital is considered an explicit cost as it involves actual monetary payments to the providers of these factors. Implicit costs, on the other hand, refer to the opportunity costs of using owner-provided resources or forgone alternative uses of a firm's resources. Accounting profit is the total revenue minus explicit costs, while economic profit is the total revenue minus both explicit and implicit costs.

Money that must be paid for the use of factors of production such as labor and capital is an:

A) explicit cost.
B) accounting profit.
C) implicit cost.
D) economic profit.

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