Question

In central Florida, the demand for real estate has been increasing rapidly for years. Therefore, the _____ cost of capital is _____ in central Florida's orange groves.a) implicit;decreasingb) explicit;increasingc) implicit;increasingd) explicit;decreasing

Answer 1

c) implicit; increasing

Step-by-step explanation:

Implicit cost may be defined as the cost that has already been occurred in the past but is not necessarily being shown or being reported as some separate expense. It is known by different names like the implied cost, imputed cost, etc. Implicit is something that is not said or mentioned clearly but is implied or suggested.

In the context, the demand for the real estate has increased rapidly in the recent years. Thus we can conclude that the implicit cost of the capital of people has increased in the orange groves of Central Florid.