Question

Which of the following is NOT an example of an explicit cost? Multiple Choice The income the owner could have earned in his or her next best employment opportunity. The salaries paid to the managers who help run the business. The overtime wages paid to workers. The rent the owner pays each month to lease office space.

Answer 1

The income the owner could have earned in his or her next best employment opportunity.

Step-by-step explanation:

Explicit cost includes all the amounts expended in running the business. It is used in calculating accounting profit. Examples are wages, rent, cost of equipment

The income the owner could have earned in his or her next best employment opportunity is an example of an implicit cost

Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives. It is used in calculating economic profit.