Explicit Costs: Definition & Examples


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question 1 of 3

What are explicit costs?

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1. How are explicit costs in business similar to a personal budget?

2. Which of the following statements is TRUE?

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About This Quiz & Worksheet

Determine your understanding of explicit costs by using this short quiz/worksheet combo. You must be familiar with this term's definition and examples of explicit costs in order to answer all questions found in this assessment.

Quiz & Worksheet Goals

This quiz is designed to measure your ability to:

  • Define explicit costs
  • Compare explicit costs in business to a personal budget
  • Differentiate between true and false statements about explicit costs
  • Recognize examples of explicit costs
  • Explain how explicit costs affect a business

Skills Practiced

  • Defining key concepts - ensure that you can accurately define explicit costs
  • Interpreting information - verify that you can read information about the effect of explicit costs on businesses and interpret it correctly
  • Making connections - use your understanding of explicit costs in business to compare them to a personal budget
  • Knowledge application - use your knowledge to answer true/false questions about explicit costs

Additional Learning

Increase your understanding of this topic with the lesson called Explicit Costs: Definition & Examples. Information explained in this lesson includes:

  • Which items are included in explicit costs
  • Why costs such as rent and payroll are explicit costs
  • What is meant by the term 'opportunity costs'