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WAEC Economics 1999 Question 8

Question 8

Theory of Costs and Revenue

In determining costs, economists consider

  1. A.implicit costs only
  2. B.explicit costs only
  3. C.implicit and explicit costs
  4. D.explicit costs less implicit costs
Show the answer and explanation

Answer: C (implicit and explicit costs)

Explanation

Economic cost includes both money (explicit) costs and the opportunity (implicit) cost of the owner's own resources.