Stop on the right cost measure

Exercise and reference answers

Questions

1. Answer

   Explicit costs

   Question

   Actual out-of-pocket payments.

2. Answer

   Implicit costs

   Question

   Subtle, but just as important.

3. Answer

   Fixed costs

   Question

   The costs of the fixed inputs.

4. Answer

   Variable costs

   Question

   These rise as output rises.

5. Answer

   Marginal cost

   Question

   The cost of one more unit.

Choices

1. Explicit costs
2. Implicit costs
3. Fixed costs
4. Variable costs
5. Marginal cost

Instructions

Tap once to start the sweep, then tap again to stop it on the correct measure.

Explanation