Distinguish between explicit and implicit costs, giving examples of each. What are some explicit and implicit costs of attending college?
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Implicit cost is incurred when a person foregoes an alternative action but does not make an actual payment. Forgone benefits of any transaction, relates to implicit cost.
Explicit cost is transacted in form of money and is directly lost. It is an easy accounted cost such as rent, wages. It also refers to hose cost a business person has to pay from his own pocket
For example. the explicit cost of a night at the movies includes the customer's ticket and soft drinks, but the implicit cost includes the pay he would have earned if he had chosen to work instead.
explicit and implicit costs of attending college
Implicit cost - Tuition and books
explicit cost - a night out with friends or attending a conference
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