Which of the following is an implicit cost in Jim's business venture?
i.the salary Jim could have earned at another job
ii.the interest Jim must pay on the loan he incurred to help open his business
iii.the interest Jim lost when he used his savings to help open his business
A) i only
B) ii only
C) iii only
D) i and iii
E) ii and iii
Implicit cost refers to economic costs that are not directly attributed to the business but are nevertheless important in making informed decisions. In this case the opportunity costs are implicit cost. They are:
Salary forgone which should have been earned at another job, and
