Implicit Costs: Definition & Examples


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What are the two umbrella categories of expenses?

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1. All of the following are alternative terms for implicit costs, EXCEPT:

2. Jesse decides to leave his job as a programmer with a salary of $70,000 to form his own startup, and he elects not to take a salary in the company's first year. Why would the $70,000 in lost income not be calculated in his company's financial records?

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About This Quiz & Worksheet

This quiz and printable worksheet quickly gauge your knowledge of what implicit costs are and why they are calculated. Topics you will need to know in order to pass the quiz include lost profits and examples of explicit costs.

Quiz & Worksheet Goals

Use this worksheet and quiz to review:

  • Other terms used to mean implicit costs
  • Umbrella categories of expenses
  • Implicit costs
  • Explicit costs

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related implicit cost lesson
  • Defining key concepts - ensure that you can accurately define main phrases, such as explicit and implicit costs
  • Knowledge application - use your knowledge to answer questions about financial records

Additional Learning

Get more information on this subject by reading Implicit Costs: Definition & Examples. The lesson has the following topics:

  • Differences between explicit costs and implicit costs
  • Examples of lost profits
  • Benefits without expenditures