Answered

Which of the following best defines economic costs?

A. The incomes a firm must provide to stay at full employment.
B. The revenue a firm must earn to attract the resources it needs away from alternative production opportunities.
C. The monetary payments that a firm makes to purchase resources it does not own.
D. The value of all resources used to produce a good or service.



Answer :

GinnyAnswer

Final answer:

Economic costs are the total opportunity costs of resources used by a firm, impacting economic profit calculations and long-term market decisions.


Explanation:

Economic costs refer to the total opportunity costs of all resources used by a firm, including explicit and implicit costs. Economic costs are crucial in determining economic profit, which is the difference between total revenue and total cost, considering both explicit and implicit costs. The decision to enter or leave a market in the long term is influenced by economic profits rather than accounting profits, as economic profits factor in the full economic costs of a firm's operation.


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