Question

Out-of-pocket expenses plus the value of the seller's own resources used in production are considered to be the seller's:

a) total cost
b) total revenue
c) profit
d) consumer surplus

Answer 1

Out-of-pocket expenses plus the value of the seller's own resources used in production are considered to be the seller's total cost.

Step-by-step explanation:

The correct answer is a) total cost.

Out-of-pocket expenses are the actual expenses paid by the seller, such as wages, rent, and supplies. The value of the seller's own resources used in production refers to the opportunity cost of using those resources instead of selling them in the market. When we add these two together, we get the total cost for the seller.

For example, if a seller uses their own land to grow crops, the value of that land (which could have been sold or rented to someone else) is considered as part of the total cost.