Which of the Following is an Example of an Implicit Cost?

Understanding Implicit Costs: The Hidden Side of Opportunity Cost

In this video, we explore the concept of implicit costs, which represent the value of the next best alternative that you forego when making a decision. Through practical examples, such as choosing between running a business and earning a salary, or studying instead of working part-time, we illustrate how implicit costs play a crucial role in calculating opportunity costs. We also distinguish implicit costs from explicit costs and clarify common misconceptions. Additionally, viewers can test their understanding with a free quiz provided.

00:00 Understanding Implicit Costs
00:11 Examples of Implicit Costs
00:42 Common Mistakes with Implicit Costs
01:03 Explicit vs Implicit Costs
01:18 Opportunity Costs vs Implicit Costs
01:35 Quiz and Conclusion