Costs of Production

Costs of Production
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Distinguish between explicit and implicit costs, giving examples of each.
Explicit costs refer to the costs that must be made by the firm to non-owners of the firm for inputs such that they can be attracted from other forms of employment such as salaries and wages paid to the firm’s employees (Surbhi, 2015). On the other hand, implicit costs involve the costs that are non-expenditure which are incurred through the use of self-employed or self-owned resources. For instance, when the firm owner’s salary is dedicated to running the activities of his or her business or firm.
What are some explicit and implicit costs of attending college?
The explicit costs of attending college involve the costs of the pens, books, tuition fees and other extra costs in case a student does not live at home such as accommodation costs. On the other hand, according to Surbhi, (2015), the implicit cost of attending college is the foregone income to attend classes or studying.
Why does the economist classify normal profit as a cost?
According to Surbhi, (2015), Economist classifies the normal profits as costs due to the firm owner, in the long run, would be forced it close it down in case there are no normal profits earned. The normal profit is regarded as a cost since it is only required to keep the operations of the firm.
Is economic profit the cost of production?
Economic profits are not considered as production costs (Surbhi, 2015). It is be…