Question

The out-of-pocket expenses incurred in producing goods are also known as:

A) Marginal costs
B) Explicit costs
C) Implicit costs
D) Opportunity costs

Answer 1

The out-of-pocket expenses incurred in producing goods are known as explicit costs, which are actual payments made by a firm for wages, rent, or materials.

Step-by-step explanation:

The out-of-pocket expenses incurred in producing goods are known as explicit costs. These are actual payments a firm makes, such as payments for wages, rent, or materials. On the other hand, implicit costs are the opportunity costs of using resources the firm already owns, which do not involve out-of-pocket expenses. Examples include using the owner's property for business purposes or the owner's time without drawing a salary. Finally, marginal costs refer to the additional cost of producing one more unit of a product, and opportunity costs are the benefits a firm misses out on when choosing one alternative over another.