Opportunity Cost Flashcards
0
Q
Explain the difference between implicit and explicit opportunity cost.
A
Explicit costs is the money spent on a good or service, While implicit costs are resources that are used in producing or consuming a product but do not include spending money.
1
Q
Define opportunity cost.
A
opportunity cost is the second best use of a resource that is forgone in production.
2
Q
What are examples of implicit and explicit opportunity cost ?
A
Using a semester at John Jay as an example explicit costs would include any money spent; tuition, books, transportation. Implicit costs would include the time used that tend class, to study, and the rate of return on savings lost when savings were depleted to pay for class.
