Which of the following are correct statements about implicit and explicit costs?
i. Normal profit is an implicit cost.
ii. Economic depreciation is an explicit cost.
iii. Wages are an explicit cost.
A) ii and iii
B) i and iii
C) iii only
D) i, ii, and iii
E) i only
B
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Which of the following contracts contain vertical restrictions that limit the transacting parties' choices but create economic value?
a. An agreement between firms to jointly invest in research and development. b. A franchise contract specifying exclusive territory of operation. c. A contract amongst competitive firms on an uniform pricing strategy. d. A collusion between two oligopoly firms specifying individual production.
Diversification of assets cannot eliminate which kind of risk?
A. Idiosyncratic risk B. Market risk C. Individual risk D. Downside risk