Explanation:

- Option 1: Production costs

These are the total costs incurred to produce goods or services, including both explicit and implicit costs.

- Option 2: Explicit costs

Correct Answer. These are the actual payments made by firms to outsiders for purchasing or hiring factor services, like wages, rent, or raw material costs. They are paid directly and recorded in the books.

- Option 3: Opportunity costs

This is the value of the next best alternative foregone when a choice is made. It's not always paid out or recorded.

- Option 4: Implicit costs

These are the costs of using self-owned resources, not paid to outsiders, and usually not recorded.