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Economic Cost
The term "cost" refers to two independent aspects of an
economic transaction: (1) the explicit (accounting) charges, and
(2) the opportunity (implicit) costs. In the context of the
production process, direct expenditures are referred to as explicit
costs. These are the aspects of costs that are most important to
accountants to keep an eye on. As a result of making a certain
choice, there is a possibility that you will not be able to take
advantage of the next best alternative. This is what is meant by
the term "opportunity cost." A decision can result in the explicit
or implicit loss of an alternative, which is referred to as an
opportunity cost rather than a direct expenditure. For instance,
reading this chapter requires sacrifice; by choosing to do so, you
have implicitly chosen not to watch television or spend your
time engaging in some other activity with that time instead.

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Economic Cost The term "cost" refers to two independent aspects of an economic transaction: (1) the explicit (accounting) charges, and (2) the opportunity (implicit) costs. In the context of the production process, direct expenditures are referred to as explicit costs. These are the aspects of costs that are most important to accountants to keep an eye on. As a result of making a certain choice, there is a possibility that you will not be able to take advantage of the next best alternative. This is what is meant by the term "opportunity cost." A decision can result in the explicit or implicit ...
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