Economics Help!!?

Question

Its a question from my take home exam.....

Costs to an economist:

a. Consist only of explicit costs

b. May or may not involve monetary outlays

c. Never reflect monetary outlays

d. Always reflect monetary outlays.

Well, i chose B. Because Explicit costs are monetary payments while the implicit costs are money that COULD have earn. But then, i m not very sure about it.

Thanks in advance!!

Answer 1

You are absolutely correct: The answer is :

b. May or may not involve monetary outlays.

Explicit costs do not include implicit costs/ opportunity costs. Some costs have both monetary outlay costs as wellas non-monetary costs ( effects like spillovers or externalities for which market prices do not exist). Sometimes however costs are just monetary outlays.

Answer 2

off course ,exolicit costs r important  but in any dynamic analysis over time (capital accu and increased productivity)

implicitisation of costs is an absolute necessary wheter at domestic level or national level say pollution or even morale

i too chooe B. and economists should b quite sure when they say something(even if it's refuted later on, it's true then)

Answer 3

B. Costs are based on the preferences of the agent. A classic example has to do with the allocation of time between work and leisure. Less leisure is considered costly.