Assignment 4.docx - Assignment 4 Jennifer Mosier Chapter 7 8 Explicit costs are out of pocket costs that a firm makes for rent wages and salaries

Assignment 4.docx - Assignment 4 Jennifer Mosier Chapter 7...

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Assignment 4 Jennifer Mosier Chapter 7 8. Explicit costs are out of pocket costs that a firm makes for rent, wages, and salaries. Implicit costs are opportunity costs that a firm makes to expand. 9. Is an interest loan an implicit cost or an explicit cost? Interest loans are implicit costs, when firms want to do something big like expand or move their location they get loans from the banks which have interest on them. 10. Accounting profit is the total revenues minus the explicit cost. Explicit profit is the total revenue minus the total costs. The difference between the two is that explicit profit includes both implicit and explicit costs and accounting only includes explicit. 11. Fixed costs are made before the production starts and do not change. Variable costs are increases in price depending on the quantity of the product. Chapter 8 12. Four basic assumptions of perfect competition, explain what they imply for perfectly competitive firm. Identical products, many buyers are available to buy many sellers available to sell products,
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