Question

which of the following would be considered an implicit cost?
a. foregone rent on assets owned by the firm
b. the salaries paid to the managers of the firm
c. the water bill of the firm
d. health insurance of employees paid for by the firm

Explanation:

Implicit costs are opportunity costs of using a firm's own resources, with no direct monetary payment. Option a is the foregone rent from using owned assets (an opportunity cost with no actual cash outflow). Options b, c, d are explicit costs—direct monetary payments made by the firm.

Answer:

a. Foregone rent on assets owned by the firm