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Review the definitions of explicit and implicit costs. Think of a time when you made a...

Review the definitions of explicit and implicit costs. Think of a time when you made a decision based on explicit costs and not (or later learned there was) an implicit cost.

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Answer #1

Explicit cost is the open payment which we are doing, it is easily recognised and included in the accounting profit or loss, implicit cost on the other hand is the hidden cost that not form the part of the general accounting, they are the opportunity cost of doing something.

I went to buy an ice cream, that was my favourite one and I paid the vendor the amount he asked for, that is an explicit cost, for buying that ice cream I had to given up fries, those fries were the opportunity cost of buying the ice cream and thereby they are the implicit cost.

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