Glossary · Micro · Economic foundations

Economic cost

The full cost of a choice: the money you pay out (explicit cost) plus the value of what you gave up to make it (implicit cost). A shop owner who could earn 50,000 dollars elsewhere bears that 50,000 dollars as an economic cost of running the shop.

Also called: implicit cost, explicit cost

Taught in: Economic vs Accounting Cost

Related terms

Accounting costOpportunity costEconomic profit

More from economic foundations

CapitalCommand economyEntrepreneurshipFactors of productionIncreasing opportunity costMarginal analysis

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