Skip to main content

🎓 New resources added daily! Join over 50,000 students using Padandas

Prepare a list of examples of explicit costs.

Prepare a list of examples of explicit costs.

Solution

Explicit costs are the recorded money payments made to the owners of factors of production, examples of which include:

  1. Wages and salaries paid to labour.
  2. Rent paid for hired land or buildings.
  3. Interest paid on loans.
  4. Cost of raw materials used in production.
  5. Utility payments such as electricity, water and fuel bills.

Explore more questions

  1. 1.

    Consider the following table:

    Points: A B C D E
    Px: 8 6 4 2 0
    Qsx: 50 40 30 20 10
    Qdx: 0 15 30 45 60

    a. Derive linear demand and supply functions.
    b. Graph Qsx and Qdx and determine equilibrium price and quantity.
    c. Compute price elasticity of supply at movement from B to D and D to B by (i) percentage method and (ii) arc method. Which method is more appropriate and why?
    d. How do business firms use the concept of price elasticity of demand in business decision making? Explain.

    Long question Asked in 2078 (15 marks)
  2. 2.

    State the characteristics of monopolistic competition. How are the price and the output determined under it in short-run? In what respects, monopolistic competition differ from perfect competition?

    Asked in 2078 (15 marks)
  3. 3.

    What is price effect? How can it be decomposed into income effect and substitution effect?

    Asked in 2078 (15 marks)
  4. 4.

    Consider the following cost schedule:

    Q: 0 1 2 3 4 5 6 7 8 9
    TVC: 0 20 36 48 64 100 160 248 360 520

    a. Compute TC, AFC, AVC, AC and MC at TFC = Rs. 200.
    b. Graph AC and MC and describe their relationship.

    Asked in 2078 (10 marks)
  5. 5.

    What are the motives of demand for money according to Keynes? Explain.

    Asked in 2078 (10 marks)
  6. 6.

    Explain the concept of incremental cost pricing with suitable examples.

    Asked in 2078 (10 marks)