Payment made to others for the purchase of factors of production is known as ........

General Studies (CGL) Indian Economy

Payment made to others for the purchase of factors of production is known as ______.

This questions was previously asked in

SSC CGL 17th August 2021 Shift-2

explicit cost

money cost

real cost

implicit cost

- Payment made to others for the purchase of factors of production refers to costs incurred for resources like labor, materials, and machinery.

- Option 1: Explicit Cost

- These are direct, out-of-pocket payments.

- They include wages, rent, and raw materials.

- Option 2: Money Cost

- This refers to the actual monetary expenditure.

- Option 3: Real Cost

- Involves the opportunity cost of resources used in production.

- Represents the value of the next best alternative foregone.

- Option 4: Implicit Cost

- These are not direct payments, often opportunity costs.

- They include foregone income or owner’s time invested.

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