Angus works as a dairy farmer and loves his work Because the

Angus works as a dairy farmer and loves his work. Because the dairy business hasn\\\'t been doing well lately, Angus is considering changing careers. He could work as a technician at the local dairy plant, and earn $27,000 a year. Angus decides to make a list of the costs of staying in business as a famer and asks you for help. Please sort Angus\\\' costs below according to whether they are explicit costs or implicit costs.

Solution

Explicit costs are those that require the outlay of the money. Implicit costs are measured by the value of the benefit foregone. The followings are the list of explicit and implicit costs involved:

EXPLICIT COSTS:
1.The wage he PAYS to his hired hand
2.The feed he BUYS for his cows
3.The gas he USES for his farm truck
4.The COST OF VETERINARY CARE for his cows

IMPLICIT COSTS:
1.TE it takes him to milk all of his cows
2.The 27000 annual salary he would receive from working at the dairy plant.