Comments on: Principles of Microeconomics Introduction http://www.discusseconomics.com/microeconomics/principles-of-microeconomics-introduction/ Join the conversation on a variety of economic and finance discussions. Thu, 09 Sep 2010 02:00:54 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Sascha http://www.discusseconomics.com/microeconomics/principles-of-microeconomics-introduction/comment-page-1/#comment-29975 Sascha Fri, 23 Jul 2010 09:54:10 +0000 http://www.discusseconomics.com/articles/microeconomics/principles-of-microeconomics-introduction/#comment-29975 Being an ignorant I decided to look up what the difference between implicit and explicit costs is. So here an example for everybody. From Wikipedia: Implicit Cost + Explicit Cost = Total Cost. Implicit cost is NOT equal to total cost, but a component of it. A simple example: Paul builds a cabinet. He spends 2 hours building the cabinet. He could have been working instead and normally makes $25/hour at his job. Since he was building a cabinet he wasn't paid for this time. The materials to make the cabinet cost him $20. * His Explicit Costs are: $20 in materials * His Implicit Costs are: $25/hr x 2 hrs= $50 of foregone pay * His Total Costs are: $20 in materials + $50 of foregone pay = $70 Total Costs ciaooo Being an ignorant I decided to look up what the difference between implicit and explicit costs is. So here an example for everybody.

From Wikipedia:

Implicit Cost + Explicit Cost = Total Cost. Implicit cost is NOT equal to total cost, but a component of it. A simple example: Paul builds a cabinet. He spends 2 hours building the cabinet. He could have been working instead and normally makes $25/hour at his job. Since he was building a cabinet he wasn't paid for this time. The materials to make the cabinet cost him $20.

* His Explicit Costs are: $20 in materials
* His Implicit Costs are: $25/hr x 2 hrs= $50 of foregone pay
* His Total Costs are: $20 in materials + $50 of foregone pay = $70 Total Costs

ciaooo

]]>